Find the quantity demanded if price is 10 income is 9000

Reference no: EM13389793

A multiplicative demand function of the form: Qd = aPb1Yb2Pob3 is estimated using cross-sectional data and 224 observations. The regression results were as follows:

Constant (a) Price

(P) Income

(Y) Price of other good (Po)

Coefficient 0.02248 -0.2243 1.3458 0.1034

Standard Error 0.01885 0.0563 0.5012 0.8145

a. How should the coefficients be interpreted in this equation? Explain.

b. What is the quantity demanded if price is $10, income is $9000, and price of the other good is $15? Show your calculations.

c Is demand elastic or inelastic? How can you tell? What impact would a price increase have on total revenue? on total profit? Explain.

d How are these two goods related? Should the firm be concerned about a change in the price of the other good? Explain.

e. Is this product a luxury, necessity, or inferior good? Explain.

Reference no: EM13389793

Questions Cloud

Assume youre a cpa and your client has requested advice : tax-planning client letter on irrevocable trusts gift tax and estate taxsuppose you are a cpa and your client has

How is organization dealing with any of the given drivers : the new business enviroment how is the organization dealing with any of the following drivers of the new business

It is the responsibility of management to apply accounting : it is the responsibility of management to apply accounting standards when communicating with investors and creditors

Consider the market where supply and demand are given by : consider a market where supply and demand are given by qxs -10 px and qxd 56 - 2px. suppose the government imposes a

Find the quantity demanded if price is 10 income is 9000 : a multiplicative demand function of the form qd apb1yb2pob3 is estimated using cross-sectional data and 224

Estimate overall explanatory power of regression model use : based on 21 months of past data ziggys drive-in has determined that the demand for its hamburgers is given by the

The parent receives annual dividends from subsidiary of : a parent holding company sells shares in its subsidiary such that the parent now owns only 65 of the subsidiary and

Draw aggregate expenditure ae curve and point out : in an economy in which government expenditure is 100 billion exports are 60 billion imports are 15 percent of real gdp

Gaap provides guidelines for inclusion of interest in : gaap provides guidelines for the inclusion of interest in the initial cost of a self-constructed asset.required1. what

User Account

All Pages