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Q. Sun Computer workstations gathered average monthly sales from its 56 branch once also dealership across the country also estimated the following Demand (sales) for its product: Q = 15000 ô€€€ 2:5P + 150A + 0:3Ppc + 0:35Pm + 0:2Pc(2:87) (ô€€€2:17) (0:67) (2:5) (2:06) (1:54)Adjusted R2 = 0:68 also standard error of the whole model, Se = 786: Numbers in the parenthesis are t-statistics. The variables also their assumed values are: Q=Quantity, P=Price of a workstation=7000, A=Advertising expenditures (in thousands)=52, Ppc=Average price of a personal computer=4000, Pm=Average price of a minicomputer=15000, Pc=Average price of a leading competitor's workstation=8000
a. That of the variables are statistically significant at the 5 %level (or %95 confidence level)?
b. Compute the price elasticity also advertising elasticity. Interpret each one.
c. Illustrate what is the predicted range of Demand for Sun workstations with 95 percent (%) confidence level.
d. You have become concerned to the rm's sales are presently lower than the profit maximizing level, given the marginal cost of $1500 per workstation. Control whether your concern is valid also suggests a latest pricing strategy: (rise/reduce/no change) the present price!
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