You have been presented with the following cost data and asked to fit a statistical cost function
Quantity Total Cost
10 104
20 107
30 109
40 111.5
50 114.5
60 118
70 123
80 128.5
90 137
100 150
1. Fit three possible statistical cost functions to the data. Use straight-line, quadratic, and cubic formulas.
2. Discuss the statistical results you obtained in question 1. Include in your discussion R2 , the coefficients, and the statistical significance of the coefficients. For the statistical significance test, use the p-test rather than the t-test. If you decide to use the t-test, you first have to find the degrees of freedom and then find the appropriate critical t-value.
3. If the data represent 10 months of production for one plant of a specific company, would you consider this to be a short-run analysis?
4. How would your answer to question 3 change if you were told that the data represent 10 different plants during a particular month of the year?