Estimate the demand function for pizza

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Reference no: EM131308698

Given below is a cross-section data from 30 college canteens serving pre-packaged pizza. The demand for pizza (Y) is found to be a function of price of pizza (P), tuition fees in the college (F) , price of 1 litre fresh juice in the canteen (Pj) and the location of the college, (L). The variable L takes only two values: 1, if a college in a large city and 0, otherwise.

Q1. Assuming .a linear relationship between the dependent variable and all the independent variables, estimate the demand function for pizza. If you are putting any extra information in your estimation, make sure you explain those. Mention the software you have used in estimating this linear relationship.

Q2. Calculate the following point-price elasticities: 1. price elasticity of demand, 2. tuition elasticity, 3. cross price elasticity (with change in juice price) at the following values of the variables P = 100, F = 14, Pj = 110, L = 1.

College	Quantity (Y)	Price (P)	Tuition Fees (F)	Price of Fresh Juice (Pj)	Location(L)
1	10	100	14	100	1
2	12	100	16	95	1
3	13	90	8	110	1
4	14	95	7	90	1
5	9	110	11	100	0
6	8	125	5	100	0
7	4	125	12	125	1
8	3	150	10	150	0
9	15	80	18	100	1
10	12	80	12	90	1
11	13	90	6	80	1
12	14	100	5	75	1
13	12	100	12	100	1
14	10	110	10	125	0
15	10	125	14	130	0
16	12	110	15	80	1
17	11	150	16	90	0
18	12	100	12	95	1
19	10	150	12	100	0
20	8	150	10	90	0
21	9	150	13	95	0
22	10	125	15	100	1
23	11	125	16	95	1
24	12	100	17	100	0
25	13	75	10	100	1
26	10	100	12	110	1
27	9	110	6	125	0
28	8	125	10	90	0
29	8	150	8	80	0
30	5	150	10	95	0

Reference no: EM131308698

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