1. Given the demand equation in problem 4 (page 174), in the text, answer the following questions:
a. Compute the elasticity for each variable and discuss the relative importance of
b. Explain how the firm could employ the computed elasticities in its
pricing and marketing decisions.
c. Which of these variables have statistically significant relationships with sales? Explain.
d. What proportion of the variation in sales is explained by the independent variables in the equation? How confident are you about this answer? Explain
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