Agnes, a General Manager in XXX Company, estimated a multiplicative demand function of the form: 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 coefficient 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 Write down the estimated demand equation Interpret the coefficients and value Describe any three managerial decisions that can be applied by the manager from the estimated demand function
Agnes, a General Manager in XXX Company, estimated a multiplicative demand function of the form: 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 coefficient 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 Write down the estimated demand equation Interpret the coefficients and value Describe any three managerial decisions that can be applied by the manager from the estimated demand function
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter4: Estimating Demand
Section: Chapter Questions
Problem 2E
Related questions
Question
Agnes, a General Manager in XXX Company, estimated a multiplicative
|
Constant |
Price(P) |
Income (I) |
Price of other Good (Po) |
Estimated coefficient |
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 |
- Write down the estimated demand equation
- Interpret the coefficients and value
- Describe any three managerial decisions that can be applied by the manager from the estimated demand function
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