Goals of data analysis Consider the following scenario. An economist seeks to estimate the magnitude of the price elasticity of demand of alcohol, which economic theory asserts is negative. This scenario most closely aligns with which of the following goals of data analysis? Quantifying relationships Describing the economy Testing hypotheses Predicting the future
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- Concept of elasticity of demand and demand forecasting are variable tools for economic analysis .validate with rxamplesUsing 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?A persent increase in the price of a good results in a percent increase in total revenue . from this information , it can be concluded that the demand over this range of prices a has increased by 14 % b is inelastic c is upward sloping d has price elasticity of demand equals to 2.5
- Case 1: A local bakery has noticed a decrease in the demand for their pastries. They found out that a new bakery in town is offering similar pastries at a lower price. What should the local bakery do based on demand analysis? Case 2: A clothing store wants to estimate the demand for a new line of summer dresses. They have historical sales data for similar dresses. What method should they use for demand estimation? Case 3: A tech company is launching a new product. They want to forecast the demand for the product for the next year. They don't have historical sales data for similar products. What method should they use for demand forecasting? Case 4: A manufacturing company is trying to determine the cost of producing a new product. They know that the cost of raw materials and labor will increase with the number of units produced, but the cost of the machinery will remain the same regardless of the number of units produced. How should they categorize these costs in their cost analysis?…These questions require application of economic theory relating to elasticity of demand andsupply. All calculations must be shown in full. Answer ALL the questions.Q.3.1 A store that sells maize meal discovers that when the price of 1kg maize meal IsR24 per kilogram, the quantity demanded is 306 kgs per week. When the pricedecreases to R21 per kg, then the sales increase to 340 kgs per week. Use thisinformation to answer questions Q.3.1.1 and Q.3.1.2 below.Q.3.1.1 Determine the price elasticity of maize meal using the Arc method. (5)Q.3.1.2 Discuss the relationship between the price elasticity of maize mealand the total revenue the store received from the sales. Advise thestore on an appropriate pricing strategy.(7)Q.3.2 The store selling maize meal makes a further discovery, when the price of ricechanges from R30 per kg to R26 per kg, then the quantity of rice demandeddecreases from 1360 kg per month to 1238 kg per month. Use this informationto answer Q.3.2.1 and Q.3.2.2 below.Q.3.2.1…The demand equation for cans of chicken is Qd= 60-3p Suppose the price of a can of chicken increases from $5 to $10. The price elasticity of demand is _________ (use decimals if necessary). We classify this price elasticity of demand as ____ over the $5 to $10 price change. A. Elastic B.Inelastic C.Unit elastic
- using picture attached Over the range from $20 to $18, Qd goes from 12 to 17. Using this range of prices and quantities, you should calculate the coefficient of price elasticity of demand. In the box labeled H1, the coefficient of price elasticity of demand is: 3.28 5 3.01 2.97 In box H2, you would interpret the coefficient calculated in the previous question. Therefore, you would characterize this range as: Elastic Unit Elastic Inelastic None of the Above Using the dataset above, if prices increased from $8 to $10, then Total Revenue will: Increase Decrease None of the aboveVina Technology makes LCD display for mobile phones. In 2020 they sold 10,000 units at $400 each. Vina Technology have determined that the midpoint price elasticity for the LCD displays is −4.33. In 2021, Vina Technology is planning to increase the price of the LCD displays to $500. Forecast sales volume for 2021 assuming that all other things remain the same.Over the range from $12 to $14, Qd goes from 30 to 24. Using this range of prices and quantities, you should calculate the coefficient of price elasticity of demand. In the box labeled E1, the coefficient of price elasticity of demand is: 2 6 1.36 1.44 In box E2, you would interpret the coefficient calculated in the previous question. Therefore, you would characterize this range as: Elastic Unit Elastic Inelastic None of the Above
- Please show in excel! Problem-solving exercises: (a) Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points of (12, $20) and (18, $16). (b) Calculate the cross-price elasticity of demand coefficient of a firm's product X, given that a 10% increase in the price of its close substitute, product Y, causes the quantity demand of product X to increase by 6%. (c) Calculate the income-elasticity of demand coefficient for a product for which a 5% increase in consumers' income will increase the quantity demanded by 4%.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 own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240? Enter your response rounded to one decimal place. Own price elasticity: Demand is: . If the firm prices above $240, revenue will:A single producer company surveyed the elasticity data of its product X. The results indicated that: - X has an income elasticity of +0.8 - The cross-elasticity of X with Y is equal to -0.7 - The price elasticity of X is |0.8| Given these results, the company estimated that the forecast increase in consumer income is 5% next year, the expected increase in the price of Y is 10%. If the company intends to increase its sales by 3% in the following year, what is your recommendation for an adjustment in the price of X? (Hint: Consider the increase in income, then the effect of Y on X and then calculate the price adjustment to be made)