Estimated regression equation

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Reference no: EM135370

Which example of productive resources is matched correctly? A) land and surgeon B) capital and oil rig C) labor and telephone wire D) entrepreneurship and rice field

The following is the estimated regression equation for Assignment 1 which quantifies the demand for Widgets (purchased by the case - 10 microwavable entres per case). Standard errors are in parentheses.

QD = 20,000 - 10P + 1500A + 5PX + 10 I
(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 independent variable, ( P, A, PX, and I), in the equation. Assume the following values for the independent variables:

Q D = Quantity demanded
P (in cents) per case = Price of the product = 8,000
PX (in cents) = Price of leading competitor's product = 9,000
I (in dollars) = Per capita income of the standard metropolitan statistical area (SMSA) where the supermarkets are located = 5,000
A (in dollars) = Monthly advertising expenditures = 64

Reference no: EM135370

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