Economics 550 – Managerial Economics

Demand Estimation

Think about that you simply work for the maker of a
main model of low-calorie, frozen microwavable meals that estimates the
following demand equation for its product utilizing information from 26 supermarkets
across the nation for the month of April.
For a refresher on unbiased and
dependent variables, please go to Sophia’s Web site and assessment the Impartial
and Dependent Variables tutorial, situated at .sophia.org/tutorials/unbiased-and-dependent-variables–Three”>http://www.sophia.org/tutorials/unbiased-and-dependent-variables–Three.

Possibility 1
Be aware: The next is a regression
equation. Customary errors are in parentheses for the demand for widgets.
QD
= – 5200 – 42P +
20PX + 5.2I + zero.20A + zero.25M
(2.002)
(17.5) (6.2) (2.5) (zero.09) (zero.21)
R2 = zero.55 n =
26
F = four.88
Your supervisor has requested you to compute
the elasticities for every unbiased variable. Assume the next values for
the unbiased variables:
Q
= Amount demanded of
Three-pack items
P (in
cents)
= Worth of the product =
500 cents per Three-pack unit
PX (in
cents)
= Worth of main
competitor’s product = 600 cents per Three-pack unit
I (in dollars)
= Per capita revenue of
the usual metropolitan statistical space
(SMSA) by which the supermarkets are situated = $5,500
A (in dollars)
= Month-to-month promoting
expenditures = $10,000
M

= Variety of microwave
ovens bought within the SMSA by which the
supermarkets
are situated = 5,000

Possibility 2
Be aware: The next is a regression
equation. Customary errors are in parentheses for the demand for widgets.
QD
= -2,000 – 100P + 15A +
25PX + 10I
(5,234)
(2.29) (525) (1.75) (1.5)
R2 = zero.85 n =
120 F =
35.25
Your supervisor has requested you to compute
the elasticities for every unbiased variable. Assume the next values for
the unbiased variables:
Q
= Amount demanded of
Three-pack items
P (in
cents)
= Worth of the product =
200 cents per Three-pack unit
PX (in
cents)
= Worth of main
competitor’s product = 300 cents per Three-pack unit
I (in dollars)
= Per capita revenue of
the usual metropolitan statistical space
(SMSA) by which the supermarkets are situated = $5,000
A (in dollars)
= Month-to-month promoting
expenditures = $640

Write a 4 to 6 (four-6) web page paper in
which you:
1.
Compute the elasticities for
every unbiased variable. Be aware: Write down all your calculations.

Decide
the implications for every of the computed elasticities for the enterprise in
phrases of brief-time period and lengthy-time period pricing methods. Present a rationale
by which you cite your outcomes.
Suggest
whether or not you consider that this agency ought to or shouldn’t lower its value to
improve its market share. Present Help on your suggestion.
Assume
that each one the elements affecting demand on this mannequin stay the identical, however
that the worth has modified. Additional assume that the worth adjustments are 100,
200, 300, 400, 500, 600 cents.

a.
Plot the demand curve for the
agency.
b. Plot the corresponding provide curve on the
similar graph utilizing the next: MC / provide operate Q = -7909.89 + 79.1P with
the identical costs.
c. Decide the equilibrium value and amount.
d.
Define the numerous elements
that would trigger adjustments in provide and demand for the low-calorie, frozen
microwavable meals. Decide the first method by which each the brief-time period
and the lengthy-time period adjustments in market situations may influence the demand for, and
the provision, of the product.

Point out
the essential elements that would trigger rightward shifts and leftward shifts
of the demand and provide curves for the low-calorie, frozen microwavable
meals.
Use at
least three (Three) high quality tutorial assets on this project. Be aware:
Wikipedia doesn’t qualify as an instructional useful resource.

Your project should comply with these
formatting necessities:
•
Be typed, double spaced, utilizing
Instances New Roman font (measurement 12), with one-inch margins on all sides; citations
and references should comply with APA or faculty-particular format. Verify along with your
professor for any extra directions.
•
Embody a canopy web page containing
the title of the project, the student’s title, the professor’s title, the
course title, and the date. The duvet web page and the reference web page usually are not
included within the required project web page size.
The particular course studying outcomes
related to this project are:
•
Analyze how manufacturing and price
capabilities within the brief run and future have an effect on the technique of particular person
corporations.
•
Apply the ideas of provide
and demand to find out the influence of adjustments in market situations within the brief
run and future, and the financial influence on a company’s operations.
•
Use know-how and knowledge
assets to analysis points in managerial economics and globalization.
•
Write clearly and concisely
about managerial economics and globalization utilizing correct writing mechanics.

Published by

Essays

View all posts