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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
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 athttp://www.sophia.org/tutorials/independent-and-dependent-variables--3.
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 + .20A + .25M
(2.002)Â (17.5) (6.2)Â Â Â (2.5)Â Â (0.09)Â Â (0.21)
R2 = 0.55 Â 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
PX (in cents)    =         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
M 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 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 = 0.85 Â 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)    =         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:
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