Homework Answers
A) coefficient in the price = -11.4
B) coefficient on average income = 0.5
C) the product is a normal good. Since there is a positive relationship between the quantity demanded and Income which is shown by a positive coefficient on Income.
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2. (Chap 3, 2.1) Your marketing research department provides the following estimated demand function for your...
Consider that the general demand function for a product X is estimated to be Qd...
Consider that the general demand function for a product X is estimated to be Qd = 500 – 5P + 0.5M + 10PY - 2PZ Where Qd is quantity demanded of good X, P is price of good X, M is consumer income (in thousands), PY is price of good Y, and PZ is price of good Z. a. Based on the estimated demand function, what is the relationship between good X and good Y; between good X...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Qd. 200 - 2Pa + 4.51 + 3.0 Py. where Pa = Price of commodity "A" I = Consumer incomes Py = Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) Is commodity "A" a normal or an inferior good? How did you...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Qd. 200 2Pa +4.5I+3.0 Py. where Pa Price of commodity "A" Consumer incomes Py Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) Is commodity "A" a normal or an inferior good? How did you know? (c) Comment on the relationship between commodity...
show all work (4) A researcher estimated a demand function for commodity "A" using weekly data...
show all work
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Qd. 200 - 2Pa + 4.51 + 3.0 Py. where Pa = Price of commodity "A" 1 = Consumer incomes Py = Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) is commodity "A" a normal or an inferior good?...
Suppose the following is an estimated log-linear demand function: ln Q = 8.99 – 3.78 ln...
Suppose the following is an estimated log-linear demand function: ln Q = 8.99 – 3.78 ln P – 1.77 ln M – 2.03 ln PR All parameter estimates are significant. 1) Is this good a normal or an inferior good? 2) Is this good a complement of or substitute for the related good? 3) What is the price elasticity of demand for this good? 4) What is the income elasticity of demand for this good?
An economic consultant for X Corp. recently provided the firm’s marketing manager with this estimate of the demand function for the firm’s product:
An economic consultant for X Corp. recently provided the firm’s marketing manager with this estimate of the demand function for the firm’s product: Q d x = 98 − 4Px + 6Py − 1M where Qd x represents the amount consumed of good X, Px is the price of good X, Py is the price of good Y , and M is income. Suppose good Y sells for $2 per unit and consumer income is $10. (a) Are goods X and Y substitutes...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Od 200 - 2Pa 4.51 + 3.0 Py. where Pa Price of commodity "A" 1 = Consumer incomes Py Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) is commodity "A" a normal or an inferior good? How did you know? (c) Comment...
The general demand and supply functions for good A are QD-2, 800-6P 0.5M-10PB Qs 40 4P...
The general demand and supply functions for good A are QD-2, 800-6P 0.5M-10PB Qs 40 4P - 8P1+6F where QD is the quantity demanded of good A, Qs is the quantity supplied of good A, P is the price of good A, M is the averaged income level of consumers, Pb is the price of a related good B, Pr is the price of an input, and F is the number of firms producing good A (a) Is good A...
Courses/ ECON705-32209-SPRING2019/ Module 1 - Introduction, Supply & Demand Module One: Assessment The following represents demand...
Courses/ ECON705-32209-SPRING2019/ Module 1 - Introduction, Supply & Demand Module One: Assessment The following represents demand for widgets (a fictional product): QD = 700-100P + 0.5M + 30PR where P is the price of widgets, M is income, and PR is the price of a related (fictiona) good, the wodget. Supply of widgets is determined by Qs = 900 + 57.5P Widgets are , and widgets and wodgets are Select one a. a normal good; substitutes. b. an inferior good;...
3. Suppose the demand function for a firm's product is given by In Q 7-1.5 In...
3. Suppose the demand function for a firm's product is given by In Q 7-1.5 In P 2 In P, -0.5 In M +InA where P = $15, P, = $6, M $40,000, and A $350. a. Determine the own price elasticity of demand, and state whether demand is b. Determine the cross-price elasticity of demand between good X and good c. Determine the income elasticity of demand, and state whether good X is a d. Determine the own advertising...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Qd. 200 - 2Pa + 4.51 + 3.0 Py. where Pa = Price of commodity "A" I = Consumer incomes Py = Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) Is commodity "A" a normal or an inferior good? How did you...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Qd. 200 2Pa +4.5I+3.0 Py. where Pa Price of commodity "A" Consumer incomes Py Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) Is commodity "A" a normal or an inferior good? How did you know? (c) Comment on the relationship between commodity...
show all work
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Qd. 200 - 2Pa + 4.51 + 3.0 Py. where Pa = Price of commodity "A" 1 = Consumer incomes Py = Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) is commodity "A" a normal or an inferior good?...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Od 200 - 2Pa 4.51 + 3.0 Py. where Pa Price of commodity "A" 1 = Consumer incomes Py Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) is commodity "A" a normal or an inferior good? How did you know? (c) Comment...
The general demand and supply functions for good A are QD-2, 800-6P 0.5M-10PB Qs 40 4P - 8P1+6F where QD is the quantity demanded of good A, Qs is the quantity supplied of good A, P is the price of good A, M is the averaged income level of consumers, Pb is the price of a related good B, Pr is the price of an input, and F is the number of firms producing good A (a) Is good A...
Courses/ ECON705-32209-SPRING2019/ Module 1 - Introduction, Supply & Demand Module One: Assessment The following represents demand for widgets (a fictional product): QD = 700-100P + 0.5M + 30PR where P is the price of widgets, M is income, and PR is the price of a related (fictiona) good, the wodget. Supply of widgets is determined by Qs = 900 + 57.5P Widgets are , and widgets and wodgets are Select one a. a normal good; substitutes. b. an inferior good;...
3. Suppose the demand function for a firm's product is given by In Q 7-1.5 In P 2 In P, -0.5 In M +InA where P = $15, P, = $6, M $40,000, and A $350. a. Determine the own price elasticity of demand, and state whether demand is b. Determine the cross-price elasticity of demand between good X and good c. Determine the income elasticity of demand, and state whether good X is a d. Determine the own advertising...
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