Calculate the elasticity for each variable at that point

Assignment Help Business Economics

Reference no: EM13154214

The following question refers to this regression equation. (Standard errors in parentheses)

Qd= 15 - 10 P + 1.5 Adv + 0.4 Px + 2 I

(5.23) (2.29) (0.525) (1.75) (1.5)

R^2 = 0.65

N = 120

F = 35.25

Standard error of Y estimate = 0.565

Qd = Quantity demanded

Consider the case when:

P = Price = 7

Adv = Advertising expense = 54

Px = price of competitor's good = 8

I = average monthly income = 4

a. Calculate the elasticity for each variable at that point and briefly comment on what information this gives you for each variable.

b. Should this firm be concerned if macroeconomic forecasters predict a recession? Explain your answer.

Reference no: EM13154214

Questions Cloud

Prepare a flexiable budget performance report : Prepare a flexiable budget performance report, assuimng that the company worked 8,500 direct labor hours during the month.

What is the molarity of a solution : What is the molarity of a solution prepared by dissolving 4.92 g of calcium nitrate, Ca(NO3)2, in 250 mL of water? (The molar mass of Ca(NO3)2 is 164 g/mol.)

Explain the heisenberg uncertainty principle : If the speed limit is 75 mph, could the driver of the car reasonably evade a speeding ticket by invoking the Heisenberg uncertainty principle?

Estimate of the stock price per share : If the company has 25 million shares of stock outstanding, what is the best estimate of the stock's price per share?

Calculate the elasticity for each variable at that point : Calculate the elasticity for each variable at that point and briefly comment on what information this gives you for each variable. Should this firm be concerned if macroeconomic forecasters predict a recession? Explain your answer.

What is the composition of gdp by percentage : What is the composition of GDP by percentage, what is the GDP per capita and If government purchases go up in the short run, what happens to GDP?

What percentage of assets are held in mortgage loans : what percentage of assets do commercial banks hold in loans? what percentage of assets are held in mortgage loans?

Find probability in month there are nine days-precipitation : Find the probability that in a given month a) there are exactly 9 days with 0.01 inch or more precipitation, b) there are at most 9 days with 0.01 inch or more precipitation.

Net income for the year amounted : The owner's equity in a business amounted to $56,000 at the beginning of the year and $100,000 at the end of the year. The owner had made no additional investments and had withdrawn $19,000 during the year. The net income for the year amounted to ..

User Account

All Pages