A new Saudi producing breads and pastries using modern techniques is interested in developing a production function for its products. The data from 15 outlets were collected and presented in the next table.
Table:
Based on the above data, estimate the production function using OLS model by Excel, and then prepare your report through answering the following questions.
- Write the function in log linear form?
- Test whether the coefficients of labor and capital are statistically significant?
- Test whether the independent variables in the regression equation are significant in explaining sales of this company
- What is the explanatory power of the model?
- What type of return to scale in this production function, explain?
- Explain what the coefficients mean?
Make sure you attach the regression Excel printout to your report upon submittal.