The ice cream store cool stuff sells exotic ice creams, including Tropical Cream

Question

The ice cream store cool stuff sells exotic ice creams, including Tropical Cream and Green Mango. Cool Stuff has been varying the prices of these two flavors over the past 16 quarters and has recorded the sales data. The table shows the quantity sold of Tropical Cream, Q, given the price of a half-gallon of Tropical Cream, P, and the price of the other flavor, Green Mango, Po. Use these data to estimate the demand function for Tropical Cream. Report and interpret the R-square.

Q P P0 210 21 13 205 23 15 213 22 15 208 23 16 205 24 16 210 23 16 218 21 13 201 25 18 205 25 18 198 26 18 205 24 17 195 26 18 222 21 19 156 25 15 189 24 14 198 20 18

Explanation / Answer

Here Q is the response variable and p is the explanatory variable.

by putting the values in excel using the slope and intercept formula we found the demand function to be Q=296-4.05848p

the r suare value is given by rsq fuction.

Q P P0 210 21 13 slope -4.05848 205 23 15 intercept 296.9883 213 22 15 therefore demand function q=296-4.05848p 208 23 16 r-square value 0.26339 205 24 16 rsq function 210 23 16 218 21 13 201 25 18 205 25 18 198 26 18 205 24 17 195 26 18 222 21 19 156 25 15 189 24 14 198 20 18

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