Plot the market transactions for widgets

Assignment Help Macroeconomics

Reference no: EM13773438

Market demand and supply

Q1 Table 1: Widgets and Gadgets

Price of Widgets ($)	10	20	30	40	50
Quantity of Widgets	5	4	3	2	1
Quantity of Widgets	1	2	3	4	5
Quantity of Gadgets	3	6	9	12	15

Refer to Table 1:

(1a.) Considering all prices, plot the market transactions for widgets.

( b.) What is the price elasticity of demand for widgets when the price goes up from $20 to $30? Briefly explain what will most likely happen to total revenue (in percentage terms) if a manager decides to increase price by 2 percent.

(c) Estimate the cross-price elasticity coefficient when the price of widgets falls from $40 to $30. What is the meaning of your elasticity coefficient?

Estimating a demand Function

Q2. A demand function is specified in terms of omitted variables and an inverse and linear relationship between quantity demanded and an endogenous variable, price. Suppose the average price is $4000 when omitted variables account for 6000 units, derive the total revenue function.

(b) Plot the marginal revenue, demand, and total revenue curves.

(d) What is the marginal revenue, in monetary terms, when quantity changes by 1000 units?

Q3. Refer to the following regression results:

Dependent Variable: Quantity of sugar packets demanded

Method Ordinary Least Squares (double log)

Included observations 44

Adjusted R²= 0.985

Coefficient Std. error

C 31.5

Price (sugar) - 0.73 0.08

Advertising Cost 0.12 0.06

Total cost 0.17 0.21

Income 0.22 0.02

Specify the regression model and interpret the regression coefficients (b) Explain why the variables are individually significant or insignificant. (c) Apart from the omitted variable bias, explain why the model has a significant structural weakness.

Reference no: EM13773438

Questions Cloud

Description the nature and scope of problem-issue : Your paper must be well documented using current AMA format. You are required to use at least 10 professional, peer-reviewed, scholarly sources in the reference page of your paper.

Analyzing a case study- apple inc : Case Study: Apple Inc., Analyzing a Case Study and Writing a Case Study Analysis

Create a full-page flyer designed to recruit new members : Choose a professional nursing organization that relates to the nursing profession or your clinical practice area. Assuming that you are the chairperson of membership for the organization, create a full-page flyer designed to recruit new members to th..

Write essay on a symptomatic reading of a cultural artifact : Write an essay on A Symptomatic Reading of a Cultural Artifact.

Plot the market transactions for widgets : (1a.) Considering all prices, plot the market transactions for widgets.( b.) What is the price elasticity of demand for widgets when the price goes up from $20 to

The connection between neurons and neurotransmitters : What is the relationship between transmitter function and a particular disease or disorder?

Examine the invention and growth of crowdsourcing : Crowdsourcing in the field of interface design takes tasks traditionally performed by specific individuals and spreads them out among a group of people or a community. These assignments are usually done through an open call.

What is your research plan : What is your research plan? Since your audience will be an academic one, your planning document should follow an accepted academic structure for presenting your claims and your evidence.

Suppose that a variable a is declared as int java eclipse : Suppose that a variable a is declared as int a = 2147483647 (or equivalently,Integer.MAX_VALUE). What do each of the following print. System.out.println(a);

User Account

All Pages