Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Chapter 5, Problem 11PA
To determine
The
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You are the manager of a large automobile dealership who wants to learn more about the effective-
ness of various discounts offered to customers over the past 14 months. Following are the average
negotiated prices for each month and the quantities sold of a basic model (adjusted for various
options) over this period of time.
1. Graph this information on a scatter plot. Estimate the demand equation. What do the
regression results indicate about the desirability of discounting the price? Explain.
Month
Price
Quantity
Jan.
12,500
15
Feb.
12,200
17
Mar.
11,900
16
Apr.
12,000
18
May
11,800
20
June
12,500
18
July
11,700
22
Aug.
12,100
15
Sept.
11,400
22
Oct.
11,400
25
Nov.
11,200
24
Dec.
11,000
30
Jan.
10,800
25
Feb.
10,000
28
2. What other factors besides price might be included in this equation? Do you foresee any
difficulty in obtaining these additional data or incorporating them in the regression analysis?
simple steps on how it should look like on excel
Consider options on a stock that does not pay dividends.The stock price is $100 per share, and the risk-free interest rate is 10%.Thestock moves randomly with u=1.25and
d=1/u
Use Excel to calculate the premium of a10-year call with a strike of $100.
Chapter 5 Solutions
Microeconomics
Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - Prob. 9RQCh. 5 - Prob. 10RQ
Ch. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - Prob. 1PACh. 5 - Prob. 2PACh. 5 - Prob. 3PACh. 5 - Prob. 4PACh. 5 - Prob. 5PACh. 5 - Prob. 6PACh. 5 - Prob. 7PACh. 5 - Prob. 8PACh. 5 - Prob. 10PACh. 5 - Prob. 11PACh. 5 - Prob. 12PACh. 5 - Prob. 13PACh. 5 - Prob. 14PACh. 5 - Prob. 15PACh. 5 - Prob. 16PACh. 5 - Prob. 17PACh. 5 - Prob. 18PACh. 5 - Prob. 19PACh. 5 - Prob. 20PACh. 5 - Prob. 21PACh. 5 - Prob. 22PACh. 5 - Prob. 23PACh. 5 - Prob. 24PACh. 5 - Prob. 25PA
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