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An estimate of the demand function for household furniture produced the following results:
A. Determine the point price and income elasticities for household furniture.
B. What interpretation would you give to the exponent for R? Why do you suppose R was included in the equation as a variable?
C. If you were a supplier to the furniture manufacturer, would you have preferred to see the analysis performed in physical sales units rather than dollars of revenue? How would this change/ alter the interpretation of the price coefficient, presently estimated as -0.48?
The demand and supply curves for T-shirts in LA, Ca, are given through the following equations, Determine the equilibrium price and quantity after the shift of the demand curve.
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