Regression analysis was applied between demand for a product (Y) and the price of the product (X), and the following estimated regression equation was obtained. Y = 120 - 15 X Based on the above estimated regression equation, if price is increased by 2 units, then demand is expecte to: O Increase by 120 units O Decease by 30 units O Increase by 20 units

Regression analysis was applied between demand for a product (Y) and the price of the product (X), and the following estimated regression equation was obtained. Y = 120 - 15 X Based on the above estimated regression equation, if price is increased by 2 units, then demand is expecte to: O Increase by 120 units O Decease by 30 units O Increase by 20 units

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose you are the manager of a firm that produces good X in Ghana. In order to make informed decision, you engaged an economist to estimate the demand equation for your product. Using data from 30 supermarkets around the country for the month of April, 2021, the estimated linear regression result for your product is shown in the table below: Variable Parameter Estimates Standard error Constant -164.0 20.24 Price of good X (P,) Price of good Y (P,) -3.50 1.55 2.50 0.28 Per capita Income (/) 0.45 0.52 R-squared 0.8672 Adjusted R-squared 0.8132 F-statistic 15.6893 a) Suppose the average price of 3 units of good X is GH¢12, price of 2 units of goodY is GH¢60, the per capita income of Ghana is GH¢420. 1. Write down the estimated demand equation for your firm's product and interpret the parameter estimates. Determine the quantity of good X sold. Estimate the own price elasticity of demand and state the type of demand curve 11. 111. your firm has?
Sally Sells Sea Shells by the Sea Shore and collects all sales dataNow she is curious to find out what the elasticity of demand is for her shells Assume they are all the same type and quantity She scatter plots the data and finds there is a linear relationship that looks ripe for a regression estimation of the price response function for her shells The slope of her regression line is 61. Currently, her average daily price is 11.74 and she sells 95 quantity at that priceCalculate the point elasticity of demand for her sea shells
Please help, this is for financial mathematics, thank you so much!!!!!
1. An analyst from your firm used a linear demand specification to estimate the demand for its product and sent you a hard copy of the results: SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Regression Residual Total Intercept Price of X Income 0.38 0.14 0.13 20.77 150 df 2 147 149 SS 58.87 -1.64 1.11 10398.87 63408.62 73807.49 Coefficients Standard Error 15.33 0.85 0.24 MS 5199.43 431.35 t Stat 3.84 -1.93 4.63 F 12.05 P-value 0.00 0.06 0.00 Significance F 0 Lower 95% 28.59 -3.31 0.63 Upper 95% b. Which regression coefficients are statistically significant at the 5 percent level? a. Based on these estimates, write an equation that summarizes the demand for the firm's product. 89.15 0.04 1.56 C. When price is $10, what is the income elasticity for this product for an income level of 35?
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The manager of a Cape Town superette carries a stock of Jive soft drinks. The countryexperiences an economic recession which yields an anticipated consumer income decrease of6 %. As a result, the income elasticity of demand for this product is estimated to be –2.5.(a) Calculate the percentage change in the quantity of your soft drink orders required toaccommodate the new demand without a surplus or shortage of inventory. [3](b) What does the elasticity coefficient of –2.5 reveal? [3]
Suppose we estimate a regression of the gallons of paint sold on the price of each gallon and find the following estimated regression line: y=268.7.-18.217x. a. Predict how many gallons would be sold if the price is $8 per gallon? b. If I have a sale and lower the price by $3, how many more gallons will I sell? I will sell gallons of paint. gallons. additional
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Suppose you are the manager of a firm that produces good X in Ghana In order to make informed decision, you engaged an economist to estimate the demand equation for your product. Using data from 30 supermarkets around the country for the month of April, 2021, the estimated linear regression result for your product is shown in the table below: Variable Parameter Estimates Standard error Constant -164.0 20.24 Price of good X (P) Price of good Y (P,) -3.50 1.55 2.50 0.28 Per capita Income () 0.45 0.52 R-squared Adjusted R-squared 0.8672 0.8132 F-statistic 15.6893 a) Suppose the average price of 3 units of good X is GH¢12, price of 2 units of goodY is GH¢60, the per capita income of Ghana is GH¢420. Write down the estimated demand equation for your firm's product and interpret 1. the parameter estimates. Determine the quantity of good X sold. Estimate the own price elasticity of demand and state the type of demand curve 1. 11 your firm has? What would be the effect of a price increase on…
Suppose Amazon lowers its Prime membership monthly fee from $12.99 to $9.99. The price elasticity of demand for Amazon membership subscription in this price range is estimated at -0.8. You predict that the number of Prime subscriptions will (increase/decrease) increase Aby (enter a number rounded to one digit after the decimal point, e.g., 22.2) A/ % and that Amazon's revenue will (increase/decrease) A by (enter a number rounded to one digit after the decimal point, e.g., 9.9) A %.