Your company just became international by offering its products in both the United States and Canada. Experts in your analytics department believe that tastes for your product differ in those two countries, and have carefully collected data on prices and quantity demanded in both countries. They then present you with the results of two regressions, one for each country, as follows: Log Price regressed on Log Quantity (United States): Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 52.75573994 10.81051303 4.88040363 1.67605E-06 31.48708283 74.0239705 Log Quantity −5.382266173 1.170584108 −4.597932039 6.15253E-06 −7.685279168 −3.079253177 Log Price regressed on Log Quantity (Canada): Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 22.8707593 10.64507785 2.148482109 0.032425603 1.9275802 43.8139384 Log Quantity −2.095788278 1.152727409 −1.818112644 0.069981782 −4.363669916 0.17209336 Assume you have adequate statistical significance for both inverse demand curves, and suppose your marginal costs are $20. What is the profit maximizing price you should charge in each country? Instruction: Round your answers to the nearest penny. United States: $ Canada: $

Calculus For The Life Sciences

2nd Edition

ISBN:9780321964038

Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Chapter1: Functions

Section1.2: The Least Square Line

Problem 7E

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Your company just became international by offering its products in both the United States and Canada. Experts in your analytics department believe that tastes for your product differ in those two countries, and have carefully collected data on prices and quantity demanded in both countries. They then present you with the results of two regressions, one for each country, as follows:

Log Price regressed on Log Quantity (United States):

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	52.75573994	10.81051303	4.88040363	1.67605E-06	31.48708283	74.0239705
Log Quantity	−5.382266173	1.170584108	−4.597932039	6.15253E-06	−7.685279168	−3.079253177

Log Price regressed on Log Quantity (Canada):

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	22.8707593	10.64507785	2.148482109	0.032425603	1.9275802	43.8139384
Log Quantity	−2.095788278	1.152727409	−1.818112644	0.069981782	−4.363669916	0.17209336

Assume you have adequate statistical significance for both inverse demand curves, and suppose your marginal costs are $20. What is the profit maximizing price you should charge in each country?

Instruction: Round your answers to the nearest penny.

United States: $

Canada: $

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