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Question: Make a valuation for Honest Tea company after being aquired by Coke company. The industry for ready to drink Teas are oligopolistic and I need a demand and cost function to represent why it makes sense for Honest Tea. Numbers are assumed, just have to be justified. (does not really matter which is used, just need a demand and cost function)
The first order of business is therefore to specify a demand function and a cost function (with real numbers, not letters). Explain in your report
(i) the interpretation of the main parameters (for example, how the coefficient on price in the demand function relates to price elasticity) and
(ii) how you can justify the values you chose for the parameters (if possible, based on information you have about Honest Tea). Do this for both the demand and the cost function.
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