Assignment 1: Demand Estimation
Due Week 3 and worth 200 points Imagine that you work for the maker of a leading brand of
low-calorie, frozen microwavable food that estimates the following
demand equation for its product using data from 26 supermarkets
around the country for the month of April. For a refresher on independent and dependent variables, please
go to Sophia’s Website and review the Independent and Dependent
Variables tutorial, located
at https://allaplusessays.com/order.
Option 1
Note:Â The following is a regression
equation. Standard errors are in parentheses for the demand for
widgets.
QDÂ Â Â Â Â Â =Â Â Â Â Â Â Â Â Â -
5200 - 42P + 20PXÂ + 5.2I + 0.20A + 0.25M (2.002)Â (17.5)
(6.2)Â Â Â (2.5)Â Â (0.09)Â Â (0.21) R2 =
0.55Â Â Â Â Â Â Â Â Â n
=
26Â Â Â Â Â Â Â Â Â Â Â Â Â Â F
= 4.88 Your supervisor has asked you to compute the elasticities for
each independent variable. Assume the following values for the
independent variables:
QÂ Â Â Â Â Â Â Â Â =Â Â Â Â Â Â Â Â Â Quantity
demanded of 3-pack units P (in
cents)Â Â Â Â Â Â =Â Â Â Â Â Â Â Â Â Price
of the product = 500 cents per 3-pack unit PXÂ (in
cents)Â Â Â Â =Â Â Â Â Â Â Â Â Â Price
of leading competitor’s product = 600 cents per 3-pack unit I (in
dollars)Â Â Â Â Â Â =Â Â Â Â Â Â Â Â Â Per
capita income of the standard metropolitan statistical area (SMSA) in which the supermarkets are located = $5,500 A (in
dollars)Â Â Â Â =Â Â Â Â Â Â Â Â Â Monthly
advertising expenditures = $10,000
MÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â =Â Â Â Â Â Â Â Â Â Number
of microwave ovens sold in the SMSA in which the supermarkets are located = 5,000
Option 2
Note:Â The following is a regression
equation. Standard errors are in parentheses for the demand for
widgets.
QDÂ Â Â Â Â Â =Â Â Â Â Â Â Â Â Â -2,000
- 100P + 15A + 25PXÂ + 10I
(5,234)Â (2.29)Â Â (525)Â Â (1.75)Â (1.5) R2 =
0.85Â Â Â Â Â Â Â Â Â n
=
120Â Â Â Â Â Â Â Â Â Â Â Â F
= 35.25 Your supervisor has asked you to compute the elasticities for
each independent variable. Assume the following values for the
independent variables:
QÂ Â Â Â Â Â Â Â Â =Â Â Â Â Â Â Â Â Â Quantity
demanded of 3-pack units P (in
cents)Â Â Â Â Â Â =Â Â Â Â Â Â Â Â Â Price
of the product = 200 cents per 3-pack unit PX (in
cents)Â Â Â Â =Â Â Â Â Â Â Â Â Â Price
of leading competitor’s product = 300 cents per 3-pack unit I (in
dollars)Â Â Â Â Â Â =Â Â Â Â Â Â Â Â Â Per
capita income of the standard metropolitan statistical area (SMSA) in which the supermarkets are located = $5,000 A (in
dollars)Â Â Â Â =Â Â Â Â Â Â Â Â Â Monthly
advertising expenditures = $640 Write a four to six (4-6) page paper in which you: Your assignment must follow these formatting requirements: The specific course learning outcomes associated with this
assignment are:
Solution details:
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This question was answered on: Sep 05, 2019
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