Albert Thomas Jr
Managerial Economics
ECO 550
Assignment #1 Instructor Xiaodong Wu Ph.D.
7/19/13

Abstract 1. The paper will show the economics of how the demand for a pizza shop will be factors. This paper will answer the following questions. Use Excel or other calculation software to input the data to calculate an estimated regression. Then, from the calculation provided, interpret the coefficient of determination, indicating how it will influence your decision to open the pizza business in your town or community. Explain any additional variables that may improve the coefficient of determination. 2. Test the statistical significance of the independent variables and the regression equation, indicating how it will impact your decision to open the pizza shop. 3. Forecast the demand for pizza for the next four (4) periods using the regression equation. 4. Based on the forecasted demand, determine whether The Pizza Company should establish an operation in your community. Provide a rationale and support for the decision.

Use Excel or other calculation software to input the data to calculate an estimated regression. Then, from the calculation provided, interpret the coefficient of determination, indicating how it will influence your decision to open the pizza business in your town or community. Explain any additional variables that may improve the coefficient of determination. In the following table it shows all of the different types of demand and how the pizza shop and how the business is working and the amount of profits that the shop will generate and show the amounts of money that go into the using of the pizza shop.

| | | | | | | | | | | | | | | | The Pizza Company | | Market | Demand (Q) | Price (P) | Competitor Price (Px) | Advertising (Ad) | Income (I) | | 1 | 596,611 | 7.62 | 6.54 | 200,259 | 54,880 | | 2 | 596,453 | 7.29 | 5.01 | 204,559 | 51,755 | | 3 | 599,201 | 6.66 | 5.96 | 206,647 | 52,955 | | 4 | 572,258 | 8.01 | 5.30 | 207,025 | 54,391 | | 5 | 558,142 | 7.53 | 6.16 | 207,422 | 48,491 | | 6 | 627,973 | 6.51 | 7.56 | 216,224 | 51,219 | | 7 | 593,024 | 6.20 | 7.15 | 217,954 | 48,685 | | 8 | 565,004 | 7.28 | 6.97 | 220,139 | 47,219 | | 9 | 596,254 | 5.95 | 5.52 | 220,215 | 49,775 | | 10 | 652,880 | 6.42 | 6.27 | 220,728 | 54,932 | | 11 | 596,784 | 5.94 | 5.66 | 226,603 | 48,092 | | 12 | 657,468 | 6.47 | 7.68 | 228,620 | 54,929 | | 13 | 519,866 | 6.99 | 5.10 | 230,241 | 46,057 | | 14 | 612,941 | 7.72 | 5.38 | 232,777 | 55,239 | | 15 | 621,707 | 6.46 | 6.20 | 237,300 | 53,976 | | 16 | 597,215 | 7.31 | 7.43 | 238,765 | 49,576 | | 17 | 617,427 | 7.36 | 5.28 | 241,957 | 55,454 | | 18 | 572,320 | 6.19 | 6.12 | 251,317 | 48,480 | | 19 | 602,400 | 7.95 | 6.38 | 254,393 | 53,249 | | 20 | 575,004 | 6.34 | 5.67 | 255,699 | 49,696 | | 21 | 667,581 | 5.54 | 7.08 | 262,270 | 52,600 | | 22 | 569,880 | 7.89 | 5.10 | 275,588 | 50,472 | | 23 | 644,684 | 6.76 | 7.22 | 277,667 | 53,409 | | 24 | 605,468 | 6.39 | 5.21 | 277,816 | 52,660 | | 25 | 599,213 | 6.42 | 6.00 | 279,031 | 50,464 | | 26 | 610,735 | 6.82 | 6.97 | 279,934 |