I need assistance with a few question from my Global Economics class.This stuff is greek to me. It is about regression and price elasticity of demand.</p><p>2. Suppose that GM's Smith estimated the following regression equation for Chevrolet automobiles: Qc = 100,000 - 100Pc + 2,000N + 50I + 30Pf - 1,000Pg + 3A + 40,000Pi Where Qc = quantity demanded per year of Chevrolet automobiles Pc = price of Chevrolet automobiles, in dollars N = population of the United States, in millions I = per capita disposable income, in dollars Pf = price of Ford automobiles, in dollars Pg = real price of gasoline, in cents per gallon A = advertising expenditures by Chevrolet, in dollars per year Pi = credit incentives to purchase Chevrolets, in percentage points below the rate of interest on borrowing in the absence of incentives. 3. Starting with the estimated demand function for Chevrolets given in Problem 2, assume that the average value of the independent variables changes to N = 225 million, I - $12,000, Pf = $10,000, Pg = 100 cents, A = $250,000, and Pi = 0 (i.e., the incentives are phased out). (a) find the equation of the new demand curve for Chevrolets. (b) if PC is $10,000, find the value of QC. </p><p>7. The total operating revenues of a public transportation authority are $100 million while its total operating costs are $120 million. The price of a ride is $1, and the price elasticity of demand for public transportation has been estimated to be – 0.4. By law, the public transportation authority must take steps to eliminate its operating deficit. (a) What pricing policy should the transportation authority adopt? Why? (b) What price per ride must the public transportation authority charge to eliminate the deficit if it cannot reduce costs? </p><p>11. Suppose that the price elasticity of demand for cigarettes is 0.46 in the short run and 1.89 in the long run, the income elasticity of demand for cigarettes is 0.50, and the cross-price elasticity of demand between cigarettes and alcohol is – 0.70. Suppose also that the price of cigarettes, the income of consumers, and the price of alcohol all increase by 10 percent. Calculate by how much the demand for cigarettes will change (a) in the short run (b) in the long run 14. Suppose that a firm maximizes its total profits and has a marginal cost (MC) of production of $8 and the price elasticity of demand for the product it sells is (-)3. Find the price at which the firm sells the product.</p>

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