Consider the following estimated equation that studies the auction price of paintings: pricen=(270.85)460.67+(.10).46inchsq(.00005).00016inchsq2+(2.03)4.28years,=396,R2=.079, where price...
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Consider the following estimated equation that studies the auction price of paintings: pricen=(270.85)460.67+(.10).46inchsq(.00005).00016inchsq2+(2.03)4.28years,=396,R2=.079, where price is the sale price of a painting (in thousands of dollars), inchsq is the size of the painting (in square inches), and years is the time between the creation of the painting and when it was sold. Standard errors are in parentheses. (a) Find the painting size that maximizes price. 1 (b) Holding years fixed, how much will an additional square inch affect the painting value if the painting is of the following sizes: (i) 100 square inches, (ii) 500 square inches, (iii) 1000 square inches. Do you observe an increasing or decreasing marginal effect of inchsq on price
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