a) Agnes, a General Manager in XXX Company, estimated a multiplicative demand function of the form: Qa = aP®p]°+Poª• using a cross-section data collected in the company sales on 30th June, 2019. The estimation results are as follows: Constant Price (P) Income (I) Price of Other Good (PO) Estimated coefficien 0.022 -0.223 1.354 0.133 Standard Error 0.012 0.056 0.502 0.814 t-statistic (1.19) (-3.98) -2.69 -0.13 Number of Observations, n = 210; R-squared = 0.7516 Critical Students' t = 1.96 at 5% Level of Significance i) Write down the estimated demand equation ii) Interpret the coefficients and R2 value iii) Describe any three managerial decisions that can be applied by the manager from the estimated demand function
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![a) Agnes, a General Manager in XXX Company, estimated a multiplicative demand function
of the form: Qa = aPªp]ª%Po@o_using a cross-section data collected in the company sales
on 30th June, 2019. The estimation results are as follows:
Constant
Price (P)
Income (I)
Price of Other Good (P0)
Estimated coefficien
0.022
-0.223
1.354
0.133
Standard Error
0.012
0.056
0.502
0.814
t-statistic
(1.19)
(-3.98)
-2.69
-0.13
Number of Observations, n = 210; R-squared = 0.7516
Critical Students' t = 1.96 at 5% Level of Significance
i) Write down the estimated demand equation
ii) Interpret the coefficients and R? value
ii1) Describe any three managerial decisions that can be applied by the manager from the
estimated demand function](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ea7c759-00ab-4dab-a2cd-22da7785e146%2F3dc237cd-668b-46d3-8d01-0743c0482003%2F1n9wue_processed.png&w=3840&q=75)
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