(1)Table 1 gives the quantity of milk (Qs) supplied by a firm per period at vari

Question

(1)Table 1 gives the quantity of milk (Qs) supplied by a firm per period at various prices (P) over 14 periods. The firm faced labor strikes in some of its plants in the 5th,6th and 7th periods. The firm wants the striking workers to be held accountable for the cost of the disruption but union management disputes that the action of its members had any long term permanent impact on the firm's interest. Evaluate the claim and counterclaim using the tools of econometrics. Conduct any test at the 5% level of significance. Table 1. Period 1 3 4 5 6 7 8 9 10 11 12 13 14 Q 98 100 103 105 80 87 94 113 116 118 121 123 126 128 0.790.80 0.820,82 0.93 0.95 0.96 0.88 0.88 0.90 0.93 0,94 0.96 0.97

Explanation / Answer

Here, i have used regression technique with null hypothesis (actions of its members had long term effects)

Alternate hypothesis: actions of its members do not have long term effects or stiking workers are responsible for disruption.

So the result shows that we will reject the null hypothesis here as the p value is less than 0.05.

SUMMARY OUTPUT Regression Statistics Multiple R 0.481028 R Square 0.231388 Adjusted R Square 0.167337 Standard Error 13.6899 Observations 14 ANOVA df SS MS F Significance F Regression 1 677.0403 677.0403 3.612552 0.081629 Residual 12 2248.96 187.4133 Total 13 2926 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 208.8238 53.17244 3.927294 0.002008 92.971 324.6766 92.971 324.6766 P -112.652 59.26974 -1.90067 0.081629 -241.79 16.48537 -241.79 16.48537

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