Business, 20.09.2020 09:01 ethanboshears15

You work for a firm producing fitness equipment. You have been told that the demand curve for the firm's main product, a multi-station home gym, is linear. You have been provided with price and quantity data obtained from focus groups and have been asked to run a regression of revenue on price. A linear functional form can properly be used to estimate: a. revenue with price and quantity included as explanatory variables.
b. quantity with price as the explanatory variable because the demand curve is linear.
c. revenue with quantity as the explanatory variable because revenue is not linear in price.
d. price with revenue as the explanatory variable because revenue determines price.
e. profit with price as the explanatory variable because revenue is not statistically significant.

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