Sally Sells Sea Shells by the Sea Shore and collects all sales dataNow she is curious to find out what the elasticity of demand is for her shells Assume they are all the same type and quantity She scatter plots the data and finds there is a linear relationship that looks ripe for a regression estimation of the price response function for her shells The slope of her regression line is 61. Currently, her average daily price is 11.74 and she sells 95 quantity at that priceCalculate the point elasticity of demand for her sea shells

Sally Sells Sea Shells by the Sea Shore and collects all sales dataNow she is curious to find out what the elasticity of demand is for her shells Assume they are all the same type and quantity She scatter plots the data and finds there is a linear relationship that looks ripe for a regression estimation of the price response function for her shells The slope of her regression line is 61. Currently, her average daily price is 11.74 and she sells 95 quantity at that priceCalculate the point elasticity of demand for her sea shells

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 1E

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1. An analyst from your firm used a linear demand specification to estimate the demand for its product and sent you a hard copy of the results: SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Regression Residual Total Intercept Price of X Income 0.38 0.14 0.13 20.77 150 df 2 147 149 SS 58.87 -1.64 1.11 10398.87 63408.62 73807.49 Coefficients Standard Error 15.33 0.85 0.24 MS 5199.43 431.35 t Stat 3.84 -1.93 4.63 F 12.05 P-value 0.00 0.06 0.00 Significance F 0 Lower 95% 28.59 -3.31 0.63 Upper 95% b. Which regression coefficients are statistically significant at the 5 percent level? a. Based on these estimates, write an equation that summarizes the demand for the firm's product. 89.15 0.04 1.56 C. When price is $10, what is the income elasticity for this product for an income level of 35?
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The Ipod Touch has been out for several years now and a lot of data has been collected. There is a functional relationship between the Price of an IPod Touch and Weekly Demand. Below is a table of data that have been collected Price P ($) Weekly Demand S (1,000s) 150 207 170 208 190 192 210 190 230 185 250 169 A.. Find the linear model that best fits this data using regression and enter the model below (for entry round the slope value to nearest 0.01 and constant parameter to nearest 1) T(p) = Now answer these two questions: B.. What does the model predict will be the weekly demand if the price of an ipod touch is $191 ? (nearest 100) C.. According to the model at what should the price be set in order to have a weekly demand of 194,800 ipod Touches? $ (nearest $1) Note: In the "real" world Apple sold about 20 million Ipod Touch's from Sept. 2007-Sept. 2009
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Café Michigan's manager, Gary Stark, suspects that demand for mocha latte coffees depends on the price being charged. Based on historical observations, Gary has gathered the following data, which show the numbers of these coffees sold over six different price values: Price $2.50 $3.60 $1.90 $4.10 $3.10 $4.10 Number Sold 760 515 980 245 325 490 Using simple linear regression and given that the price per cup is $1.85, the forecasted demand for mocha latte coffees will be cups (enter your response rounded to one decimal place).