Question

The following regression equations are from the study of the demand for chicken in the United States for the time period 1960 - 1982. The estimated is given below (t-statistics in parenthesis):

Y = 37.24 + .0050 (X₁) - .6104(X₂) + .1977 * (X₃) + .0693*(X₄)

(9.99) (1.031) (3.742) (3.321) (1.357)

R² = .9424

n = 34, k = 5

Y = Per Capita Consumption of Chickens in pounds

X₁= Real Disposable Income per capita in dollars

X₂ = Real Retail Price of Chicken per pound in cents

X₃ = Real Retail Price of Pork per pound in cents

X₄ = Real Retail Price of Beef per pound in cents

a. Using this equation suppose you are given the following values of your independent/explanatory variables: X₁ = 1165.9; X₂ = 58.3; X₃ = 123.5; X₄ = 142.9. Forecast the value of chicken consumption given the specified values of each X.

b. Calculate the point price elasticity of demand for chicken given the values in part a.

Note: EP = Price Elasticity of Demand

EP = %?Q = ?Q * P

%?P ?P Q

c. Interpret the elasticity coefficient in part b.

Please show all calculations and complete explanation on how to solve this problem.