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Are you able to check my work on this problem?

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$15.99
SKU:
118090


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Are you able to check my work on this problem?

 

Note: The following is a regression equation. Standard errors are in parentheses for the demand for widgets.

QD      =         - 5200 - 42P + 20PX + 5.2I + 0.20A + 0.25M

(2.002) (17.5) (6.2)   (2.5)  (0.09)  (0.21)

R2 = 0.55         n = 26              F = 4.88

Your supervisor has asked you to compute the elasticity for each independent variable. Assume the following values for the independent variables:

Q= quantity demanded of 3-pack units

P (in cents)=price of product=500 cents per 3-pack unit

PX (in cents)=Price of leading competitors product=600 cents per 3-pack unit

I (in dollars)= per capita income of the standard metropolitan statistical area (SMSA) in which the supermarkets are located =$5,500

A (in dollars)= Monthly advertising expenditures =$10,000

M=Number of microwave ovens sold in SMSA in which the supermarkets are located = 5,000

Quant. Demanded= (-5200) - 42(500) + 20(600) +5.2(5,500) + .20(10,000) + .25(5,000)

               =(-5200) -21,000 + 12,000 + 28,600 + 2,000 + 1,250 = 17,650

Cross Price Elasticity

=20, PX=600, QD=17,650

=20(600/17,650)

=0.68, there are substitutes

Income Elasticity

=5.2(I/QD)

=5.2, I=5,500, QD= 17,650

=5.2(5,500/17650)

= 1.62

 Advertisement Elasticity

=.20(A/QD)

=.20, A=10,000, QD=17,650

=.20(10,000/17,650)

=0.11

Supply Elasticity

0.25(M/QD)

=.25, M= 5,000, QD= 17,650

=.25(5,000/17,650)

=0.071


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