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.
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.