Reference no: EM13859613

Pricing Strategy Presentation:

Take the data from San Francisco Bread Company and run the regression as defined in the case study provided. Verify your results with those presented in the book. Answer problems A & C from the case set. In answering C use the averages from the data. Next I want you to use your coefficient estimates to calculate the price, cross-price, and income elasticities of demand. Given your calculations, if San Francisco Bread want to raise total revenue should they raise or lower their sale price? Is the competition's product a substitute or a complement? Write up your answers and submit them no later than 9am Friday, 10/23.

Note: An elasticity is the percentage change in a y variable divided by the percentage change in a x variable, %?Y/%?X=?Y/?X x Avg. X/Avg. Y. If you want to find the price elasticity of demand for example it would be the change in quantity divided by the change in price multiplied by the average of your price data divided by the average of your quantity data. To get more information about calculating elasticities and the relationship to total revenue and defining goods as substitutes or complements use the power point slides from Ch. 5 (in week 3). Also, you should be aware that the coefficient estimates from your regression represent the change in quantity/change in your x variable. You can then use the averages of quantity and the given x variable to complete your elasticitleay calculations.

Attachment:- San Fran Bread Data (1).xlsx