A Time Series Regression Equation for a Surfboard Manufacturing Company

question 72

Multiple Choice

A time series regression equation for a surfboard manufacturing company in Australia is given below: Y = 35 + 4Q₁ + 0.5Q₃ + 8Q₄ + 3t
With t in quarters, the origin is December 2010 and Q₁ is the indicator variable for March, Q₃ is the indicator variable for September and Q₄ is the indicator variable for December.
Which of the following is the correct value of the estimate for the number of surfboards sold by this manufacturing company in June 2013?

• A) 68
• B) 77.5
• C) 65
• D) None of these choices are correct

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs like opportunity costs.

ATC

Stands for Average Total Cost, which is the total cost of production divided by the quantity of output produced.

AVC

Average Variable Cost, the variable cost per unit of output.

MC

Marginal Cost, the increase in cost that arises from producing one additional unit of a good or service.