1a MidCentury Lilac Exercises

pdf

School

Boston University *

*We aren’t endorsed by this school

Course

856

Subject

Economics

Date

Feb 20, 2024

Type

pdf

Pages

Uploaded by MajorGalaxy9336

Lilac Soap A manufacturer of fancy scented bar soaps is interested in the price elasticity shown by her popular lilac variety. She assembled data for each of the past twenty months concerning the number of bars sold, the price, and the number of retail outlets that put the lilac soap on display and then carried out a regression analysis on this data. Here are the resulting means for each variable. The regression output is on the next page: 32 Mean Variable 2,506 Bars of lilac soap sold 1.59 Price 167.9 Number of displays

Lilac Soap 1. What is the coefficient of the price variable in the Excel output? 2. Describe how you would explain the interpretation of this price coefficient to someone who is not familiar with multiple regression. 3. Calculate the price elasticity implied by these results. 33

Exercise: Mid-Central Electric Seeking to increase profits, Mid-Central Electric Co. is trying to decide whether to ask the Public Utilities Commission for permission to raise its rates. Some managers feel that a rate increase will not increase profits because higher rates will cause their customers to use less electricity, but other managers disagree. Finally, the numbers are in: The director of marketing has determined that the breakeven sales level for a rate increase of 5 percent would be a unit sales loss of 8.6 percent. The market research department has determined that the price elasticity of Mid-Central's market is –1.12. Use these numbers to determine whether it would increase Mid-Central’s profits to raise rates by 5 percent. □ Rate increase would decrease profits. □ Rate increase would increase profits. □ Cannot be determined. Source: Schindler, Pricing Strategies 34

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

2023_f_hw13_prompt_v1-1.pdf

guided_exercises_week_4.pdf

ECN_1AY_Week_3_Assignment_2023.pdf

Week 2 Discussion - SPMT410.docx

Homework 02.docx

FARE4000 - Winter 2024 - Assignment 1.doc

ADM CHEAT SHEET PT2.pdf

Individual Project - How Much Do Supply and Demand Drive Inflation.docx

Chapter 18 Questions2018 (1).docx

CJ 3309 Week Four Questions.docx

Econ final essay 2.docx

Matthew Seobarrat30.docx

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...

Economics

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:Cengage Learning

MACROECONOMICS FOR TODAY

Economics

ISBN:9781337613057

Author:Tucker

Publisher:CENGAGE L

Micro Economics For Today

Economics

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Cengage,

Economics For Today

Economics

ISBN:9781337613040

Author:Tucker

Publisher:Cengage Learning

Survey Of Economics

Economics

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Cengage,

Microeconomic Theory

Economics

ISBN:9781337517942

Author:NICHOLSON

Publisher:Cengage

SEE MORE TEXTBOOKS

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
MACROECONOMICS FOR TODAY
Economics
ISBN:9781337613057
Author:Tucker
Publisher:CENGAGE L
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage