Eco 550

Note: The following is a regression equation. Standard errors are in parentheses for the demand for widgets. QD = – 5200 – 42P + 20PX + 5.2I + .20A + .25M (2.002) (17.5) (6.2) (2.5) (0.09) (0.21) R2 = 0.55 n = 26 F = 4.88 Your supervisor has asked you to compute the elasticities for each independent variable. Assume the following values for the independent variables: Q = Quantity demanded P (in cents) = Price of the product = 500 PX (in cents) = Price of leading competitor’s product = 600 I (in dollars) = Per capita income of the standard metropolitan statistical area (SMSA) in which the supermarkets are located = 5,500 A (in dollars) = Monthly advertising expenditures = 10,000 M = Number of microwave ovens sold in the SMSA in which the supermarkets are located = 5,000 Title (only for Xoon) As discussed Category : Eco Price: $30