Tag Archives: MLE

Compare the least squares estimators with the MLE.Problem 2-20ptsThe marketing department of Coca Colawanted to analyze the relationship between the price of Coke and the demand forit. They were concerned that if they continue increasing the price, people will switch to Pepsi. Calculate 𝛽0Μ‚and 𝛽1Μ‚for the following data and give interpretation for the results.

Problem 1 -20ptsConstruct the likelihood function 𝐿(𝛽0,𝛽1,𝜎2)of:𝑓(π‘Œπ‘–,𝛽0,𝛽1,𝜎2)=1√2πœ‹πœŽ2exp[βˆ’12(π‘Œπ‘–βˆ’π›½0βˆ’π›½1π‘₯π‘–πœŽ)2]Where π‘Œπ‘–~𝑁(𝛽0+𝛽1π‘₯𝑖,𝜎2)and estimate𝛽0,𝛽1and𝜎2in π‘Œπ‘–=𝛽0+𝛽1π‘₯𝑖+πœ€π‘–, where πœ€π‘–~𝑁(0,𝜎2),using the MLE. Compare the least squares estimators with the MLE.Problem 2-20ptsThe marketing department of Coca Colawanted to analyze the relationship between the price of Coke and the demand forit. They were concerned that if they continue increasing the price, people will switch to […]