The Following Data Show the Demand for an Airline Ticket

question 39

Multiple Choice

The following data show the demand for an airline ticket dependent on the price of this ticket. For the assumed cubic and log-log regression models, Demand = β₀ + β₁Price + β₂Price² + β₃Price³ + ε and ln(Demand) = β₀ + β₁ln(Price) + ε, the following regression results are available. Assuming that the sample correlation coefficient between Demand and = exp(26.3660 - 3.2577 ln(Price) + (0.2071) ²/2) is 0.956, what is the percentage of variations in Demand explained by the log-log regression model?

• A) 98.52%
• B) 98.50%
• C) 91.39%
• D) 97.93%

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