A Researcher Analyzes the Relationship Between Amusement Park Attendance and the Price

question 49

Essay

A researcher analyzes the relationship between amusement park attendance and the price of admission. She estimates the following model: Attendance = β₀ + β₁ Price + ε, where Attendance is the daily attendance (in 1,000s) and Price is the gate price (in $). A portion of the regression results is shown in the accompanying table. a. Predict the Attendance for an amusement park that charges $80 for admission.
B) Interpret the slope coefficient for Price.
C) Calculate the standard error of the estimate.
D) Calculate and interpret the coefficient of determination. How much of the variability in Attendance is unexplained?

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Definitions:

Controlled Costs

Expenses that a company can manage or influence directly.

Static Planning Budget

A budget based on a fixed set of assumptions and output levels, without adjustments for actual activity or performance.

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a business, such as materials and labor.

Activity Variance

The difference between a revenue or cost item in the flexible budget and the same item in the static planning budget. An activity variance is due solely to the difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget.