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215 determine the advertising elasticity of demand

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-2.15 Determine the advertising elasticity of demand. 1.05 What interpretation would you give to the exponent of N? Increase in 1% in population of 12 year old will increase the demand of the general cereal’s product by 3.70%. 6. The demand for haddock has been estimated as log Q = a + b log P + c log I + d log Pm where Q = quantity of haddock sold in New England P = price per pound of haddock I = a measure of personal income in the New England region Pm = an index of the price of meat and poultry If b = −2.174, c = 0.461, and d = 1.909,
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Myisha Coleman April 22, 2013 Determine the price elasticity of demand. -2.174 Determine the income elasticity of demand. 0.461 Determine the cross price elasticity of demand. 1.909 How would you characterize the demand for haddock? -2.175- the demand is elastic because it is more than 1 0.461=if income increased by1% its effect is minimum. 1.909=if price elasticity is 1.909 there will potentially be an effect on haddock. Suppose disposable income is expected to increase by 5 percent next year. Assuming all other factors remains constant, forecast the percentage change in the quantity of haddock demanded next year. If there is a 5% increase in income there will be a 2.305% change in quantity demanded
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Myisha Coleman April 22, 2013 7. An estimate of the demand function for household furniture produced the following results: F = 0.0036Y1.08R0.16P −0.48 r2 = 0.996 where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index 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?
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