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Yeager Corporation has used regression analysis to perform price elasticity analysis. In doing so management regressed the quantity demanded (y variable) against price (x variable) with the following results:
Multiple R 0.86798
Adjusted R squared 0.72458
Standard error 542.33
Intercept 56400.5
Price coefficient –4598.20
1. What percentage of the variation in quantity demanded is explained by price?
a. 86.798%
b. 72.458%
c. 56.4%
d. 54.233%
2. Calculate the predicted quantity demanded if price is set at $7.00.
a. 24,213
b. 88,588
c. 31,234
d. 18,454
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