Reference no: EM13245675
Analysts at the Fleetfeet Corporation estimate a demand function for its athletic shoe line to be:
Qf = 5 - 2.4*Pf + 0.7*A + 0.002*I + 0.8*Ps
Where Qf = the quantity of shoes sold, Pf = the own price of shoes produced by Fleetfeet ($/pair)
A = the advertising expenditures for Fleetfeet shoes ($/ad unit in a year), I = income in Fleetfeet's market ($/year), Ps = the price of shoes produced by the Swiftshoes corporation ($/pair)
(a) Interpret the coefficients of each explanatory variable.
(b) If Pf is $60, A is $200, I is $20,000 and Ps is 100, what is the quantity of Fleetfeet shoes sold?
(c) Calculate the own price elasticity of demand for Fleetfeet shoes. Interpret this measure.
(d) Calculate the income elasticity of demand. Interpret this measure.
(e) Calculate the cross price elasticity of demand. Interpret this measure.
(f) Given the answers of (c) through (e), what is the most important factor in determining the demand for shoes?
(g) If the Fleetfeet corporation seeks to reduce its advertising expenditures to $190, and seeks to offset the lost revenues in part by changing its price, should the price be increased or decreased? Explain.
How would persuade the manager at corporate headquarters
: Imagine for a moment that you're the general manager of a local, upscale grocery store that is part of a national chain. You've just gotten word from corporate headquarters that all stores must install at least two self-checkout machines.
|
Using what you have learned in this course explain
: You have been hired by Nobody State University as a consultant to help the university with how to increase their total revenue. The university has been struggling in recent years,
|
The law of comparative advantage recommends that countries
: The law of comparative advantage recommends that countries specialize in those products in which they have a comparative advantage, not an absolute advantage.
|
Determine the angular velocity of the earth
: Assume the Earth is in uniform cicular motion about the sun. Explain how to determine the angular velocity of the Earth
|
Interpret the coefficients of each explanatory variable
: Analysts at the Fleetfeet Corporation estimate a demand function for its athletic shoe line to be: Qf = 5 - 2.4*Pf + 0.7*A + 0.002*I + 0.8*Ps Where Qf = the quantity of shoes sold, Pf = the own price of shoes produced by Fleetfeet ($/pair)
|
How banks are financial intermediaries
: Explain how banks are financial intermediaries. What are reserves? What are excess reserves? Explain how the Fed can affect the quantity of excess reserves in the banking system
|
What is the socially optimal number of years of education
: The accompanying table illustrates the marginal benefit to Sian per year of education and the marginal cost per year of education. Each year of education has a marginal external benefit to society equal to $8,000.
|
Who can produce any linear combination of chickens
: Suppose that two people, Michelle and James each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens. If Michelle devotes all her resources to growing potatoes
|
What is the mass of the unknown element
: A sample containing beryllium (atomic mass 9 u), aluminum (27 u), and an unknown element is placed in a mass spectrometer, What is the mass of the unknown element
|