Using linear regression analysis, Jack's Boot Company estimated its demand function for a popular riding boot and achieved the following results:
Q_B = 445 - 6.57P_B + 1.35P_C + .25A
where
Q_B = quantity sold per month of the riding boots
P_B = price of the riding boot
P_C = price of a competing company's boot
A = monthly advertising expenditures
a. How can Jack's use this information to find its price, income and cross price elasticity of demand?
b. What would an R² of 0.92 indicate?
c. Can you think of a potentially important variable that Jack's has ignored in its demand analysis?

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The Answer of Using linear regression analysis, Jack's Boot Company estimated its demand function for a popular riding boot and achieved the following results: Q_B = 445 - 6.57P_B + 1.35P_C + .25A where Q_B = quantity sold per month of the riding boots P_B = price of the riding boot P_C = price of a competing company's boot A = monthly advertising expenditures a. How can Jack's use this information to find its price, income and cross price elasticity of demand? b. What would an R² of 0.92 indicate? c. Can you think of a potentially important variable that Jack's has ignored in its demand analysis?

Using Linear Regression Analysis, Jack's Boot Company Estimated Its Demand