a) Agnes, a General Manager in XXX Company, estimated a multiplicative demand function of the form: Qa = aP®p]°+Poª• using a cross-section data collected in the company sales on 30th June, 2019. The estimation results are as follows: Constant Price (P) Income (I) Price of Other Good (PO) Estimated coefficien 0.022 -0.223 1.354 0.133 Standard Error 0.012 0.056 0.502 0.814 t-statistic (1.19) (-3.98) -2.69 -0.13 Number of Observations, n = 210; R-squared = 0.7516 Critical Students' t = 1.96 at 5% Level of Significance i) Write down the estimated demand equation ii) Interpret the coefficients and R2 value iii) Describe any three managerial decisions that can be applied by the manager from the estimated demand function
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
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![a) Agnes, a General Manager in XXX Company, estimated a multiplicative demand function
of the form: Qa = aPªp]ª%Po@o_using a cross-section data collected in the company sales
on 30th June, 2019. The estimation results are as follows:
Constant
Price (P)
Income (I)
Price of Other Good (P0)
Estimated coefficien
0.022
-0.223
1.354
0.133
Standard Error
0.012
0.056
0.502
0.814
t-statistic
(1.19)
(-3.98)
-2.69
-0.13
Number of Observations, n = 210; R-squared = 0.7516
Critical Students' t = 1.96 at 5% Level of Significance
i) Write down the estimated demand equation
ii) Interpret the coefficients and R? value
ii1) Describe any three managerial decisions that can be applied by the manager from the
estimated demand function](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ea7c759-00ab-4dab-a2cd-22da7785e146%2F3dc237cd-668b-46d3-8d01-0743c0482003%2F1n9wue_processed.png&w=3840&q=75)
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