Great Deal! Get Instant $10 FREE in Account on First Order + 10% Cashback on Every Order Order Now

Economics Summer 2020 Cost Project Instructions: In this project, you will use Microsoft Excel to estimate cost functions. As was the case with the Demand Project from earlier in the term, you will...

1 answer below »
Economics
Summer 2020
Cost Project
Instructions: In this project, you will use Microsoft Excel to estimate cost functions. As was the case with the Demand Project from earlier in the term, you will need the “Analysis ToolPak” to do this. The data you will need is the Excel file “cost_data_fall2020.xlsx” in the “Cost Project” module on D2L. The data contains information on the quantity of energy output produced at a given plant within a large energy corporation and the associated total cost for that plant. Please submit your regression output and plots within an Excel workbook (with your name included in the name of the file). Submit your answers to the rest of the questions as a Word document or PDF (with your name included in the name of the file). Both files can be uploaded to the “Cost Project” Dropbox on the D2L site.
1. Perform a linear regression where average cost is the dependent variable and where quantity and quantity squared are the explanatory variables. Use the line plot fit option to make a plot of the actual and predicted average cost values.
2. What shape does the estimated average cost curve have? How do you interpret this?
3. If a plant now has to produce in whole number increments, what output level minimizes average cost?
4. If a new plant produces 22 units, what is the predicted average cost?
5. Given your estimates, by how much would a manager expect TOTAL COST to change if output were increased from 17 to 19 units?
6. Using logic similar to what you used in part 5 above, what is the estimated marginal cost of the 21st unit? Be clear about how you calculate this.
costdatasummer2020-4t2lboak.xlsx cost-project-summer-2020-0v4ck5l0.docx
Answered Same Day Jun 14, 2021

Solution

Komalavalli answered on Jun 15 2021
153 Votes
Cost data
    Total Cost    Quantity    Quantity Squared    Average Cost
    46.54    3.61    13.01    12.90        SUMMARY OUTPUT
    179.40    20.04    401.41    8.95
    49.37    4.25    18.08    11.61        Regression Statistics
    29.64    1.09    1.19    27.20        Multiple R    0.4350854208
    107.23    15.53    241.21    6.90        R Square    0.1892993234
    132.55    17.42    303.51    7.61        Adjusted R Square    0.1783439089
    63.98    8.34    69.52    7.67        Standard E
or    33.3038670789
    75.72    11.28    127.21    6.71        Observations    151
    84.37    12.82    164.34    6.58
    185.79    20.27    410.80    9.17        ANOVA
    219.52    21.68    470.20    10.12            df    SS    MS    F    Significance F
    30.79    1.25    1.56    24.65        Regression    2    38330.0663248522    19165.0331624261    17.2790653038    0.0000001802
    157.81    18.91    357.56    8.35        Residual    148    164153.839236489    1109.1475624087
    62.74    7.97    63.49    7.87        Total    150    202483.905561341
    90.90    13.72    188.33    6.62
    152.17    18.66    348.33    8.15            Coefficients    Standard E
or    t Stat    P-value    Lower 95%    Upper 95%    Lower 95.0%    Upper 95.0%
    215.43    21.54    463.91    10.00        Intercept    58.9576426428    8.0814493971    7.2954292907    0    42.9877087081    74.9275765776    42.9877087081    74.9275765776
    172.63    19.65    386.25    8.78        Quantity    -8.8426706788    1.6520526103    -5.352535763    0.0000003238    -12.1073290027    -5.578012355    -12.1073290027    -5.578012355
    114.13    16.09    258.90    7.09        Quantity Squared    0.3236553983    0.0707936834    4.571811816    0.0000101336    0.1837584081    0.4635523884    0.1837584081    0.4635523884
    58.40    6.64    44.13    8.79
    207.63    21.17    447.99    9.81
    100.01    14.70    216.13    6.80
    61.97    7.68    58.94    8.07        RESIDUAL OUTPUT
    240.91    22.40    501.65    10.76                                        Quantity    ac        tc
    65.56    8.73    76.25    7.51        Observation    Predicted Average Cost    Residuals                        17    2.17        36.8670703695
    73.21    10.72    114.91    6.83        1    31.28    -18.3730167149                        18    4.65        83.7705502493
    160.62    19.10    364.88    8.41        2    11.71    -2.7575308117                        19    7.79        147.9434717829
    211.26    21.33    455.09    9.90        3    27.21    -15.5970715266                        20    11.57        231.32776736
    67.69    9.33    87.11    7.25        4    49.70    -22.5064052793                        21    15.99        335.86536937
    196.44    20.76    431.02    9.46        5    -0.31    7.2125313388                            -1.72        0
    59.62    6.99    48.88    8.53        6    3.14    4.47106105
    43.04    3.00    9.00    14.34        7    7.73    -0.0556620029                        change in total cost    111.0764014134    Marginal cost of 21st...
SOLUTION.PDF
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here
Attach File