Managerial Economics Case Study

1010 Words Dec 22nd, 2011 5 Pages
MANAGERIAL ECONOMICS
ECO 556
BM221 4c

“DEMAND FOR VE MICROWAVE OVEN”

TABLE OF CONTACT

1.0 INTRODUCTION
2.0 METHODOLOGY
3.0 DATA DEMAND FOR VE MICROWAVE OVEN
4.0 EQUATION
5.0 FINDINGS AND INTERPRETATION
5.1 Evaluation of Statically Significant At 95% Or Significant Level for Each Independent Variable.
5.2 Interpretation Coefficient of Determination
5.3 Interpretation of F-Test
5.4 Interpretation of Standard Error of Estimate
5.5 Derivation of Demand Curve
5.6 Elasticity of Demand
6.0 CONCLUSION
APPENDIX
REFERENCE

1.0 INTRODUCTION
VE Microwave Products Limited is engaged in designing and manufacturing of high value added Radio Frequency and microwave super components and sub systems findings application in
…show more content…
When the price is increased by RM1, the quantity demanded will be decrease by 1.166 units. ii ) Qd and Pc have a positive relationship. When the price of competitor is increased by RM1, the quantity demanded will be increase by 0.117 units. It means the product is a substitute goods. iii ) Qd and Y have a negative relationship. When the average household income is increased by 1%, the quantity demanded will be decreased by 0.03%.

5.1 Evaluation of Statically Significant At 95% or Significant Level for Each Independent Variable.

Degree of Freedom = n – k – 1 = 18 – 3 – 1 = 14
T –value (from the table) = 2.145

Variable | T-value | Interpretation | P | 4.502 > 2.145 | Significant | Pc | 1.300 < 2.145 | Not Significant | Y | 1.676 < 2.145 | Not Significant |

5.2 Interpretation of Coefficient of Determination

R² = 0.836

This figure shows that 83.6% of total change in quantity demanded can be explained by independent variable of P, Pc and Y. While 16.4% of total change in quantity demanded is explained by other variable that is not included in the equation.
The high value of R² means that the great fit of equation. This equation is acceptable.

5.3 Interpretation of F-test

REGERESSION ANALYSIS Variables Entered/Removed(b) Model | Variables Entered | Variables Removed | Method | 1 | Income, Pc, Price(a) | . | Enter | a All requested
Open Document