What interpretation would you give the exponent for r

Assignment Help Business Economics
Reference no: EM13154543

An estimate of the demand function for household furniture produced the following results:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

F=0.0036Y R P r =0.996

Where F=furniture expenditures per household

Y=disposable personal income per household

R=value of private residential construction per household

P=ratio of furniture price index to the consumer price index

(A) Determine the point price and income elasticities for household furniture.

(B) What interpretation would you give the exponent for R? Why do you suppose R was included in the equation as a variable?

(C) If you were a supplier to the furniture manufacturer, would you have preferred to see the analysis performed in physical sales units rather than dollars of revenue? How would this change alter the interpretation of the price coefficient, presently estimated as -0.48?

 

Reference no: EM13154543

Questions Cloud

What combination of monetary and fiscal policy should choose : what combination of monetary and fiscal policy should they choose? Use a graph, and be sure to identify the effects of each policy.
Two primary responsibilities of the financial manager : What are two primary responsibilities of the financial manager. From the Internet what are two additional ideas about the other activities that financial managers are involved in on a day-to-day basis.
Calculate the ph of buffer solution : calculate the ph of buffer solution made from .20 M HC2H3O2 and .050 M C2H3O2 that has an acid dissociation constant for HC2H3O2 of 1.8*10-5.
Probability to receive five or more email during same period : What is the probability Linda Lahey, company president, received exactly 1 email between 4 P.M. and 5 P.M. yesterday? What is the probability she received 5 or more email during the same period?
What interpretation would you give the exponent for r : What interpretation would you give the exponent for R? Why do you suppose R was included in the equation as a variable?
Active portfolio management and passive management : 1- Explain the difference between Active Portfolio Management and Passive Management. 2- Briefly describe the four components of a business cycle.
What is the minimum pressure in kpa that must be applied : What is the minimum pressure in kPa that must be applied at 25 °C to obtain pure water by reverse osmosis from water that is 0.156 M in sodium chloride and 0.094 M in magnesium sulfate?
What is equivilent annual cost for swithcing to new system : An adiitional feature is that the computer shop will give her 500 for her old computer on a trade in. What is the equivilent annual cost for keeping her computer? What is the equivilent annual cost for swithcing to the new system?
Bonds pay interest semiannually : Knapp Company plans to issue 6% bonds on January 1, 2009, with a par value of $2,000,000. The company sells $1,800,000 of the bonds on January 1, 2009. The remaining $200,000 sells at par on March 1, 2009. The bonds pay interest semiannually as of..

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd