Suppose the Kalamazoo Brewing Company (KBC) currently sells its microbrews in a

Question

Suppose the Kalamazoo Brewing Company (KBC) currently sells its microbrews in a seven-state area: Illinois, Indiana, Michigan, Minnesota, Mississippi, Ohio, and Wisconsin. The company's marketing department has collected data from its distributors in each state. This data consists of the quantity and price (per case) of microbrews sold in each state, as well as the average income (in thousands of dollars) of consumers living in various regions of each state. The data for each state are available via the link below please note there are multiple tabs at the bottom of the spreadsheet, each refers to one of the seven states seling the Kalamazoo Brewing Company's microbrews. Excel Data File Assuming that the underlying demand relation is a linear function of price and income, use your spreadsheet program to obtain least squares estimates of l inois's demand for KBC microbrews Instruction: If the estimate is negative, enter a negative number )in the equation. Enter your responses rounded to two decimal places. Price + Income

Explanation / Answer

Q = (positive)+(negative)Price+(positive)income

The coefficient is positive because even when Price is zero, the quantity demanded is maximum and positive.

As price increases the Quantity demanded is falls, the coefficient is negative.

As income increases the quantity demanded increases., therefore the coeff is positive.

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