Determine and discuss the impact of diesel prices on fuel revenues and the impact of gasoline prices on fuel revenues. What is the relationship between meal prices and meals? Define, measure, and discuss the price elasticities.
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- Interpret the coefficients and calculate the price elasticity of soft drink demand.Q. 4. Determine and discuss the impact of diesel prices on fuel revenues and the impact of gasoline prices on fuel revenues. What is the relationship between meal prices and meals? Define, measure, and discuss the price elasticities. HINT: Find price elasticity of demand by multiplying the slope of the regression line from Excel by the mean real price then divide by the mean quantity demanded.The coefficient of income in a regression of the quantity demanded of a commodity on price, income and other variables is 10. Calculate the income elasticity of demand for this commodity at income of $10,000 and sales of 80,000 units. What would be the income elasticity of demand if sales increased from 800,000 to 900,000 units and income rose from $10,000 to $11,000? What type of good is this commodity?
- Using regression analysis on data from a field experiment, the demand curve for a product is estimated to be QXd = 1,200 − 3PX − 0.1PZ where Pz = $300. a. What is the own price elasticity of demand when Px = $140? Is demand elastic or inelastic at this price? b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? c. What is the cross-price elasticity of demand between good X and good Z when Px = $140?Suppose that you are concerned about teenage smoking in the Philippines. You are interested in what the impact would be if a P10 excise tax was added to each pack of cigarettes sold. You have the following data available: Elasticity of Demand (General Public): -.5 Elasticity of Demand (Teenagers): -.82 Elasticity of Supply: 6.1 Current Market Price of Cigarettes: P50.51 Current Cigarette Sales: 21.8B Use the following model and assume linearity. Qd = a +bP Qs = c +dP Find the parameters of a, b, c and d. Using your estimated model, solve for the equilibrium price and quantity. We already know this, but you should double check to make sure you did part (a) right.There is a functional relationship between Price of an IPod Touch, � and Weekly Demand,
- Suppose that News Corp., which controls the United States’ largest satellite-to-TV broadcaster, is contemplating launching a Spaceway satellite that could provide highspeed Internet service. Prior to launching the Spaceway satellite, suppose that News Corp. used least squares to estimate the regression line of demand for satellite Internet services. The best-fitting results indicate that demand is Qdsat = 152.5 − .8Psat +1.2PDSL + .5Pcable (in thousands), where Psat is the price of satellite Internet service, PDSL is the price of DSL Internet service, and Pcable is the price of high-speed cable Internet service. Suppose that after the FCC’s ruling the price of DSL, PDSL, is $25 per month and the monthly price of high-speed cable Internet, Pcable, is $50. Furthermore, News Corp. has identified that its monthly revenues need to be at least $15 million to cover its monthly costs. If News Corp. set its monthly subscription price for satellite Internet service at $55, would its revenue be…Using regression analysis on data from a field experiment, the demand curve for a product is estimated to be QXd = 1,200 − 3PX − 0.1PZ where Pz = $300.What is the cross-price elasticity of demand between good X and good Z when Px = $140? Are goods X and Z substitutes or complements? Enter your response rounded to two decimal places. Cross-price elasticity: Goods X and Z are:The REDY Company produces a specialty cement used in the construction of roads. REDY is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f( P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard. The manager of REDY obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 64 0.8093 84.872 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01 2.04 0.0461 PC -3.54 1.64 -2.16 0.0357 M…
- An economic research centre has published data on GDP and Demand for refrigerators as given below:Year 2011 2012 2013 2014 2015 2016 2017GDP (billion) 20 22 25 27 30 33 35Refrigerator 50 60 80 80 90 100 120(a) Estimate regression equation R= a+by, where R= No of refrigerator sold and Y= GDP.Forecast demand for refrigerator in the year 2018 and 2019. The research centre has projected GDP for 2018 and 2019 at Rs. 38 billion and Rs. 40 billion respectively.following the estimation of the income elasticity of demand. During this analysis, utilize the logarithmic transformations of PCE (Personal Consumption Expenditures) and PDI (Personal Disposable Income). Could you please provide the calculated cointegrating coefficient and its interpretation? > A) The calculated cointegrating coefficient is -0.09, indicating that there is a lagged adjustment of PCE to DPI. Approximately 9 percent of the difference between long-term and short-term PCE is corrected within a quarter. > B) The calculated cointegrating coefficient is -0.069, indicating that there is a lagged adjustment of PCE to DPI. Approximately 6.9 percent of the difference between long-term and short-term PCE is corrected within a quarter. > C) The calculated cointegrating coefficient is -0.08, indicating that there is a lagged adjustment of PCE to DPI. Approximately 8 percent of the difference between long-term and short-term PCE is corrected within a quarter. > D)…Suppose that a coffee producing firm estimated the following regression of thedemand for its brand of coffee:Qc = 1.5 − 3.0Pc + 0.8Y + 2.0Pb − 0.6PS +1.2 Awhere Qc = sales of coffee brand C, in dollarsper pound Pc = price of coffee brand C,in dollars per poundY = personal disposable income, in millions of dollars per yearPb = price of the competitive brand of coffee, in dollarsper pound Ps = price of sugar, in dollars per poundA = advertising expenditures for coffee brand C, in hundreds of thousands ofdollars per year.Suppose also that this year, Pc = $2, Y = $2.5, Pb = $1.80,Ps = $1 and A =$1.a. Interpret the results of the estimated demand.b. Compute point price elasticity of demand for the firm’s brand of coffeewith respect to its price.c. Compute the cross-price elasticity of demand for coffee with respect to theprice of competitive coffee brand b.d. At the current price level, would it be viable for the firm to increase the pricelevel of its brand of coffee? Support your answer.…