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AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors of your product are Asaase Wura fertilizer from YARA Ghana Ltd. As an expert in the marketing of fertilizers, you have been poached from YARA Ghana Ltd to oversee the marketing of this new product. For you to make informed decision and advise the board appropriately, you engaged an economist who estimated the demand equation for your firm's product. The economist used data from 549 cocoa farmers around the country for the month of January 2021 to estimate a linear regression for your product: Variable Parameter Estimates Standard error Intercept -144 24.2347 -2.5 0.98261 Price of BedRock Fertlizer per bag (Px) Price of Asaase Wura Fert per bag (Py) 1.25 0.0242 0.20 0.3685 Per capita Income (I) Advertising (A) 0.06 0.0224 R-squared 0.9219 Adjusted R-squared 0.8947 F-statistic 7.8394 Now suppose 2 bags of BedRock Fertlizer is sold for GH 40, a bag of Asaase Wura Fertilizer is sold for GH 40, the per capita income of cocoa farmers is GH¢750, the company spends GH 800 on advertising. a. Write down the estimated demand equation for your firm's product. b. Test for the significance of the estimated coefficients of the explanatory variables at 5% significance level using t = 2. c. Interpret the coefficient of the significant variables.

AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors of your product are Asaase Wura fertilizer from YARA Ghana Ltd. As an expert in the marketing of fertilizers, you have been poached from YARA Ghana Ltd to oversee the marketing of this new product. For you to make informed decision and advise the board appropriately, you engaged an economist who estimated the demand equation for your firm's product. The economist used data from 549 cocoa farmers around the country for the month of January 2021 to estimate a linear regression for your product: Variable Parameter Estimates Standard error Intercept -144 24.2347 -2.5 0.98261 Price of BedRock Fertlizer per bag (Px) Price of Asaase Wura Fert per bag (Py) 1.25 0.0242 0.20 0.3685 Per capita Income (I) Advertising (A) 0.06 0.0224 R-squared 0.9219 Adjusted R-squared 0.8947 F-statistic 7.8394 Now suppose 2 bags of BedRock Fertlizer is sold for GH 40, a bag of Asaase Wura Fertilizer is sold for GH 40, the per capita income of cocoa farmers is GH¢750, the company spends GH 800 on advertising. a. Write down the estimated demand equation for your firm's product. b. Test for the significance of the estimated coefficients of the explanatory variables at 5% significance level using t = 2. c. Interpret the coefficient of the significant variables.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Question 3 AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors of your product are Asaase Wura fertilizer from YARA Ghana Ltd. As an expert in the marketing of fertilizers, you have been poached from YARA Ghana Ltd to oversee the marketing of this new product. For you to make informed decision and advise the board appropriately, you engaged an economist who estimated the demand equation for your firm's product. The economist used data from 549 cocoa farmers around the country for the month of January 2021 to estimate a linear regression for your product: Variable Parameter Estimates Standard error Intercept -144 24.2347 Price of BedRock Fertlizer per bag (Px) -2.5 0.98261 Price Vura Fert per bag (Py) 1.25 0.0242 Per capita Income (I) 0.20 0.3685 Advertising (A) 0.06 0.0224 R-squared 0.9219 0.8947 Adjusted R-squared F-statistic 7.8394 Now suppose 2 bags of BedRock Fertlizer is sold for GH¢40, a bag of Asaase Wura Fertilizer is sold for GH 40, the per capita income of cocoa farmers is GH¢750, the company spends GH¢800 on advertising. a. Write down the estimated demand equation for your firm's product. b. Test for the significance of the estimated coefficients of the explanatory variables at 5% significance level using t = 2. c. Interpret the coefficient of the significant variables. d. Determine the quantity of BedRock Fertlizers bought by consumers. e. Estimate the own price elasticity of demand and state the type of demand Curve. f. What would be the firm's price policy option? g. Assess the probable impact on your firm if YARA Ghana decreases the price of Asaase Wura Fertilizer by 8%. h. Interpret the adjusted R-squared
Transcribed Image Text:Question 3 AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors of your product are Asaase Wura fertilizer from YARA Ghana Ltd. As an expert in the marketing of fertilizers, you have been poached from YARA Ghana Ltd to oversee the marketing of this new product. For you to make informed decision and advise the board appropriately, you engaged an economist who estimated the demand equation for your firm's product. The economist used data from 549 cocoa farmers around the country for the month of January 2021 to estimate a linear regression for your product: Variable Parameter Estimates Standard error Intercept -144 24.2347 Price of BedRock Fertlizer per bag (Px) -2.5 0.98261 Price Vura Fert per bag (Py) 1.25 0.0242 Per capita Income (I) 0.20 0.3685 Advertising (A) 0.06 0.0224 R-squared 0.9219 0.8947 Adjusted R-squared F-statistic 7.8394 Now suppose 2 bags of BedRock Fertlizer is sold for GH¢40, a bag of Asaase Wura Fertilizer is sold for GH 40, the per capita income of cocoa farmers is GH¢750, the company spends GH¢800 on advertising. a. Write down the estimated demand equation for your firm's product. b. Test for the significance of the estimated coefficients of the explanatory variables at 5% significance level using t = 2. c. Interpret the coefficient of the significant variables. d. Determine the quantity of BedRock Fertlizers bought by consumers. e. Estimate the own price elasticity of demand and state the type of demand Curve. f. What would be the firm's price policy option? g. Assess the probable impact on your firm if YARA Ghana decreases the price of Asaase Wura Fertilizer by 8%. h. Interpret the adjusted R-squared
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