Regression Analysis: Estimating Market Demand
The goal of this assignment is to use Excel to estimate the demand for a product to
examine what changes the quantity of that product demanded. Include your name in the
document. Pay attention to spelling and grammar.
Step 1 Questions
1. Run excel regression.
2. Write out, precisely, the estimated equation of demand.
3. What do the values of the Coefficients on the intercept, and others mean?
Step 2 Questions: Elasticities
4. Transform your original dataset to ln dataset and run Excel regression on the new
dataset.
5. What is the price elasticity of demand for your product?
6. Calculate how responsive consumers are to a 1% increase in the price of your product?
Explain what this tells you about the demand for your product.
7. Are your product and others complements or substitutes? Explain.
8. Calculate how responsive your consumers are to a 1% increase in the price of other
products.
9. Is your product a normal good or an inferior good? Explain.
10. Calculate how responsive your consumers are to a 1% increase in per capita
disposable income.