Demand estamation

Demand estamation Paper details: Students, please view the "Submit a Clickable Rubric Assignment" in" rel="nofollow">in the Student Center. Instructors, train" rel="nofollow">inin" rel="nofollow">ing on how to grade is within" rel="nofollow">in the Instructor Center. Assignment 1: Demand Estimation Due Week 3 and worth 200 poin" rel="nofollow">ints Imagin" rel="nofollow">ine that you work for the maker of a leadin" rel="nofollow">ing brand of low-calorie, frozen microwavable food that estimates the followin" rel="nofollow">ing demand equation for its product usin" rel="nofollow">ing data from 26 supermarkets around the country for the month of April. For a refresher on in" rel="nofollow">independent and dependent variables, please go to Sophia’s Website and review the Independent and Dependent Variables tutorial, located at http://www.sophia.org/tutorials/in" rel="nofollow">independent-and-dependent-variables--3. Option 1 Note: The followin" rel="nofollow">ing is a regression equation. Standard errors are in" rel="nofollow">in parentheses for the demand for widgets. QD = - 5200 - 42P + 20PX + 5.2I + 0.20A + 0.25M (2.002) (17.5) (6.2) (2.5) (0.09) (0.21) R2 = 0.55 n = 26 F = 4.88 Your supervisor has asked you to compute the elasticities for each in" rel="nofollow">independent variable. Assume the followin" rel="nofollow">ing values for the in" rel="nofollow">independent variables: Q = Quantity demanded of 3-pack units P (in" rel="nofollow">in cents) = Price of the product = 500 cents per 3-pack unit PX (in" rel="nofollow">in cents) = Price of leadin" rel="nofollow">ing competitor’s product = 600 cents per 3-pack unit I (in" rel="nofollow">in dollars) = Per capita in" rel="nofollow">income of the standard metropolitan statistical area (SMSA) in" rel="nofollow">in which the supermarkets are located = $5,500 A (in" rel="nofollow">in dollars) = Monthly advertisin" rel="nofollow">ing expenditures = $10,000 M = Number of microwave ovens sold in" rel="nofollow">in the SMSA in" rel="nofollow">in which the supermarkets are located = 5,000 Option 2 Note: The followin" rel="nofollow">ing is a regression equation. Standard errors are in" rel="nofollow">in parentheses for the demand for widgets. QD = -2,000 - 100P + 15A + 25PX + 10I (5,234) (2.29) (525) (1.75) (1.5) R2 = 0.85 n = 120 F = 35.25 Your supervisor has asked you to compute the elasticities for each in" rel="nofollow">independent variable. Assume the followin" rel="nofollow">ing values for the in" rel="nofollow">independent variables: Q = Quantity demanded of 3-pack units P (in" rel="nofollow">in cents) = Price of the product = 200 cents per 3-pack unit PX (in" rel="nofollow">in cents) = Price of leadin" rel="nofollow">ing competitor’s product = 300 cents per 3-pack unit I (in" rel="nofollow">in dollars) = Per capita in" rel="nofollow">income of the standard metropolitan statistical area (SMSA) in" rel="nofollow">in which the supermarkets are located = $5,000 A (in" rel="nofollow">in dollars) = Monthly advertisin" rel="nofollow">ing expenditures = $640 Write a four to six (4-6) page paper in" rel="nofollow">in which you: 1. Compute the elasticities for each in" rel="nofollow">independent variable. Note: Write down all of your calculations. 2. Determin" rel="nofollow">ine the implications for each of the computed elasticities for the busin" rel="nofollow">iness in" rel="nofollow">in terms of short-term and long-term pricin" rel="nofollow">ing strategies. Provide a rationale in" rel="nofollow">in which you cite your results. 3. Recommend whether you believe that this firm should or should not cut its price to in" rel="nofollow">increase its market share. Provide support for your recommendation. 4. Assume that all the factors affectin" rel="nofollow">ing demand in" rel="nofollow">in this model remain" rel="nofollow">in the same, but that the price has changed. Further assume that the price changes are 100, 200, 300, 400, 500, 600 cents. a. Plot the demand curve for the firm. b. Plot the correspondin" rel="nofollow">ing supply curve on the same graph usin" rel="nofollow">ing the followin" rel="nofollow">ing MC / supply function Q = -7909.89 + 79.1P with the same prices. c. Determin" rel="nofollow">ine the equilibrium price and quantity. d. Outlin" rel="nofollow">ine the significant factors that could cause changes in" rel="nofollow">in supply and demand for the low-calorie, frozen microwavable food. Determin" rel="nofollow">ine the primary manner in" rel="nofollow">in which both the short-term and the long-term changes in" rel="nofollow">in market conditions could impact the demand for, and the supply, of the product. 5. Indicate the crucial factors that could cause rightward shifts and leftward shifts of the demand and supply curves for the low-calorie, frozen microwavable food. 6. Use at least three (3) quality academic resources in" rel="nofollow">in this assignment. Note: Wikipedia does not qualify as an academic resource. Your assignment must follow these formattin" rel="nofollow">ing requirements: • Be typed, double spaced, usin" rel="nofollow">ing Times New Roman font (size 12), with one-in" rel="nofollow">inch margin" rel="nofollow">ins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional in" rel="nofollow">instructions. • Include a cover page contain" rel="nofollow">inin" rel="nofollow">ing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not in" rel="nofollow">included in" rel="nofollow">in the required assignment page length. The specific course learnin" rel="nofollow">ing outcomes associated with this assignment are: • Analyze how production and cost functions in" rel="nofollow">in the short run and long run affect the strategy of in" rel="nofollow">individual firms. • Apply the concepts of supply and demand to determin" rel="nofollow">ine the impact of changes in" rel="nofollow">in market conditions in" rel="nofollow">in the short run and long run, and the economic impact on a company’s operations. • Use technology and in" rel="nofollow">information resources to research issues in" rel="nofollow">in managerial economics and globalization. • Write clearly and concisely about managerial economics and globalization usin" rel="nofollow">ing proper writin" rel="nofollow">ing mechanics. Click here to view the gradin" rel="nofollow">ing rubric for this assignment.