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Question: just the fax inc jtf hired a consultant to estimate...

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Just the Fax, Inc. (JTF) hired a consultant to estimate the demand for its line of telecommunications devices in 35 different market areas for one month. The available data set includes observations on the number of thousands of units sold by JTF per month (QX), the price per unit charged by JTF (PX), the average unit price of competing brands (PZ), monthly advertising expenditures by JTF (A), and average gross sales (in thousands of dollars) of businesses in the market area (I). The consultant provided the results below without the estimated coefficients. However, she provided the following:

- Standard errors (in parenthesis) - t-stats [in square brackets]
- R square.

QX=b0 +b1PX +b2PZ +b3A+b4I (250) (1.4) (0.8) (0.05) (0.04) [1.5] [-2.5] [1.5] [3.0] [2.5]

R2 = 0.80

JTF has hired you as a second consultant to produce the estimated coefficients, and to determine whether they are statistically significant.
Answer the following questions using the table below:

i. Calculate the missing coefficients for the intercept and the four independent variables in column 2 of the table below.

ii. If the critical t value at 5% significance level is 2.04, indicate in column 3 whether the calculated coefficients are significantly different from zero.

Variable

Coefficient

Significant/Not Significant

Intercept

Px

Pz

A

I

iii. What is the interpretation of the R2 value of 0.80?

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