Q1. A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships and estimated the following demand for its product: Q= 15000 - 2.8P + 150A + 0.3 Ppc + 0.35 Pm + 0.2Pc (5.234) (1.29) (175) (0.12) (0.17) (0.13) R^2 = 0.68 Numbers in brackets are standard error of coefficient (SEC) t statistics = b^/SEC Q= Quantity P = Price of basic model=7000 A= Advertising expenditures (in thousands) = 52 Ppc = Average price of a personal computer = 4000 Pm= Average price of a minicomputer 15000 Pc= Average price of a leading competitor's workstation = 8000 a. Compute the elasticities for each variable. b. Conduct a t-test for the statistical significance of each variable.

Q1. A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships and estimated the following demand for its product: Q= 15000 - 2.8P + 150A + 0.3 Ppc + 0.35 Pm + 0.2Pc (5.234) (1.29) (175) (0.12) (0.17) (0.13) R^2 = 0.68 Numbers in brackets are standard error of coefficient (SEC) t statistics = b^/SEC Q= Quantity P = Price of basic model=7000 A= Advertising expenditures (in thousands) = 52 Ppc = Average price of a personal computer = 4000 Pm= Average price of a minicomputer 15000 Pc= Average price of a leading competitor's workstation = 8000 a. Compute the elasticities for each variable. b. Conduct a t-test for the statistical significance of each variable.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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