Qd= 100 - 3P regression result for your product is shown in the table below:VariableParameter EstimatesStandard errorConstant-164.020.24Price of good X (P,)Price of good Y (P,)-3.501.552.500.28Per capita Income ()0.450.52R-squaredAdjusted R-squared0.86720.8132F-statistic15.6893a) Suppose the average price of 3 units of good X is GH¢12, price of 2 units of goodY isGHe60, the per capita income of Ghana is GH¢420.Write down the estimated demand equation for your firms product and interpretthe1.parameter estimates.I11.Determine the quantity of good X sold.111.Estimate the own price elasticity of demand and state the type of demand curveтуреirm has?yourWhat would be the effect of a price iıncrease on the firm's total revenue?iv.V.Assess the probable impact on your firm if the firm producing good Y decreasestheirprice by 10%.Explain the adjusted R-squaredIs the good X a normal or inferior good?vi.vii.viii.What is the relationship between good X and good Y? b) Now suppose the economist also estimated the supply curve for your product as: Q% =-47+2.5P,- 1.5P, + 0.75RP is the average price of unskilled labour, and R is the average annual rainfall. Inaddition, suppose the equilibrium values of unskilled labour and rainfall are GH¢10 and40 inches respectivelyDetermine the equilibrium price and quantity for good X and represent them on agraph.Suppose the government imposes a tax of GH¢4 on every good X sold, what willbe the new equilibrium price and quantity?1.111.What is the total tax revenue?1V.How would the consumers and producers share the tax?Represent the demand curve, old and new supply curves on a graph and find thedeadweight lossV.

Answered: Image /qna-images/answer/1a3d3d1f-7d62-4cb6-8096-2d7eb57d1502.jpg

Variable Parameter Estimates Standard error Constant -164.0 20.24 Price of good X (P.) Price of good Y (P,) -3.50 1.55 2.50 0.28 Per capita Income (/) 0.45 0.52 R-squared Adjusted R-squared 0.8672 0.8132 F-statistic 15.6893 a) Suppose the average price of 3 units of good X is GH¢12, price of 2 units of goodY is GH¢60, the per capita income of Ghana is GH¢420. Write down the estimated demand equation for your firm's product and interpret the parameter estimates. Determine the quantity of good X sold. Estimate the own price elasticity of demand and state the type of demand curve 1. 11. 111. your firm has? What would be the effect of a price increase on the firm's total revenue? iv.

Variable Parameter Estimates Standard error Constant -164.0 20.24 Price of good X (P.) Price of good Y (P,) -3.50 1.55 2.50 0.28 Per capita Income (/) 0.45 0.52 R-squared Adjusted R-squared 0.8672 0.8132 F-statistic 15.6893 a) Suppose the average price of 3 units of good X is GH¢12, price of 2 units of goodY is GH¢60, the per capita income of Ghana is GH¢420. Write down the estimated demand equation for your firm's product and interpret the parameter estimates. Determine the quantity of good X sold. Estimate the own price elasticity of demand and state the type of demand curve 1. 11. 111. your firm has? What would be the effect of a price increase on the firm's total revenue? iv.

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

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 1E: For each of the determinants of demand in Equation 2.1, identify an example illustrating the effect...

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