Suppose that Honda has asked you to conduct a focus group to predict how the number of Honda Accord vehicles demanded would change if the price changes.
economics
Description
Suppose that Honda has asked you to conduct a focus group to predict how the number of Honda
Accord vehicles demanded would change if the price changes.
You arrange a focus group of 50 potential car buyers to illustrate how Honda could answer such
question. You asked the members of the group if they would be willing to buy an Accord at various
prices. As a result, for each of eight prices ranging from $5,000 to $40,000, you have the following
information on how many Accords will be demanded at each price by this group.
a. Enter the data in an Excel spread sheet and graph the data using a SCATTER plot and insert a Trend line function.
b. Using Excel’s Regression analysis, estimate the simple regression (demand for Accord) and report the estimated equation (you can round the estimated coefficients to FIVE decimal points). Place the regression output in a separate sheet in the same excel file and label the sheet as Reg_Output.
c. What is the R2 (report this as a percentage), and based on the reported R2 do you think this regression can reasonably be used for analysis?
d. At the 5% level, how significant is the intercept and the price variable?
e. How many cars do you expect Honda to sell if the price is $21,500 (round your answer since Cars are
sold in whole units)?
