I. The regression output below is was obtained from the monthly profits of Delic
ID: 3043929 • Letter: I
Question
I. The regression output below is was obtained from the monthly profits of Delicious Meals Restaurant. Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA 0.2686 0.0722 0.0694 92.691 334 Significance F 6.26E-07 Regression Residual Total 25.82 332 Coefficients P-value 0.0003 0.00006256 Intercept 150 2.93 a. Write down the firm's profit function. b. What is the appropriate independent variable here? Do not say x ory c. What is the firm's total profit when 10 units are sold? d. What is the firm's breakeven output? e. Sketch a graph of the profit function.Explanation / Answer
solutionA:
firms profit function is
y=150-2.93(x)
y=totalprofit
x=no of units
Solutionb:
Appropriate independent variable is no of units produced,x
Solutionc:
x=10
substitute in the regression eq we get
y=150-2.93(x)
0 =150-2.93(x)
x=150/2.93
x=51
break even ouput=51 units
total profit=121 unit
Solutind
firms brakeven we get when x=0
so
y=150-2.93(x)
=150-2.93(0)
y=150
fimrs