Author Question: In using regression analysis to estimate demand, which of the following problems is most directly a ... (Read 22 times)

lak

  • Hero Member
  • *****
  • Posts: 546
In using regression analysis to estimate demand, which of the following problems is most directly a result of insufficient data?
 
  A) the identification problem
  B) the problem of a low R2
  C) the problem of high standard errors
  D) the problem of insignificant F-statistics

Question 2

Consider a monopolist with linear (inverse) demand p = a - bQ and constant average and marginal cost, c. Derive the monopolist's profit and the deadweight loss generated.
 
  Show that in such cases of linear demand and constant average and marginal cost, the deadweight loss is 50 of the monopolist's profits.



asdfghjkl;

  • Sr. Member
  • ****
  • Posts: 323
Answer to Question 1

A

Answer to Question 2

Profit = (a - bQ)Q - cQ
dProfit/dQ = a - 2bQ - c = 0
Q = (a - c)/2b
p = (a + c)/2
Profit = (a - c)2/4b
DWL = (a - c)2/8b



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Though newer “smart” infusion pumps are increasingly becoming more sophisticated, they cannot prevent all programming and administration errors. Health care professionals that use smart infusion pumps must still practice the rights of medication administration and have other professionals double-check all high-risk infusions.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

Did you know?

The National Institutes of Health have supported research into acupuncture. This has shown that acupuncture significantly reduced pain associated with osteoarthritis of the knee, when used as a complement to conventional therapies.

Did you know?

Sildenafil (Viagra®) has two actions that may be of consequence in patients with heart disease. It can lower the blood pressure, and it can interact with nitrates. It should never be used in patients who are taking nitrates.

For a complete list of videos, visit our video library