Precision Engineering department has collected data on its average costs of production for the past 12 months. The monthly fixed cost is $4000 per month. The AVC and associated output data are presented below:
| Month |
Q |
AVC $ |
| Jan |
70 |
375 |
| Feb |
58 |
540 |
| Mar |
160 |
450 |
| Apr |
120 |
255 |
| May |
130 |
138 |
| Jun |
120 |
150 |
| Jul |
10 |
450 |
| Aug |
35 |
350 |
| Sep |
80 |
60 |
| Oct |
110 |
70 |
| Nov |
100 |
90 |
| Dec |
190 |
153 |
Run the appropriate regression to calculate the estimated parameters for the empirical cost function AVC = a + bQ + cQ2. The answer should include regression output from the statistical software.
Additional Information
This question based on the Statistics and it is about calculating the empirical cost function AVC = a + bQ + cQ2 by running the appropriate regression analysis.