Question

The ice cream store cool stuff sells exotic ice creams, including Tropical Cream and Green Mango. Cool Stuff has been varying the prices of these two flavors over the past 16 quarters and has recorded the sales data. The table shows the quantity sold of Tropical Cream, Q, given the price of a half-gallon of Tropical Cream, P, and the price of the other flavor, Green Mango, Po. Use these data to estimate the demand function for Tropical Cream. Report and interpret the R-square.

Q	P	P0
210	21	13
205	23	15
213	22	15
208	23	16
205	24	16
210	23	16
218	21	13
201	25	18
205	25	18
198	26	18
205	24	17
195	26	18
222	21	19
156	25	15
189	24	14
198	20	18

Answer 1

Here Q is the response variable and p is the explanatory variable.

by putting the values in excel using the slope and intercept formula we found the demand function to be Q=296-4.05848p

the r suare value is given by rsq fuction.

Q	P	P0
210	21	13		slope	-4.05848
205	23	15		intercept	296.9883
213	22	15			therefore demand function q=296-4.05848p
208	23	16		r-square value	0.26339
205	24	16		rsq function
210	23	16
218	21	13
201	25	18
205	25	18
198	26	18
205	24	17
195	26	18
222	21	19
156	25	15
189	24	14
198	20	18