Exhibit 16

question 53

Multiple Choice

Exhibit 16.5.The following data shows 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: Refer to Exhibit 16.5.Assuming that the sample correlation coefficient between Demand and is 0.956,what is the percentage of variations in Demand explained by the log-log regression equation?

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

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