Really great job. Thank you so much. I really love it. Thank you so much for all of your help.
Bob’s Underground, a limited liability corporation specializing in new rap artists (B.U. LLC, rap) has the following demand function:
where QQ is the quantity demanded of the most popular product B.U. sells, PP is the price of that product, MM is income, and RR is the price of a related product. The regression results are:
Adjusted R2R2 0.7711
Independent VariablesCoefficientsStandard Errort-statP-value
Do you think these regression results will generate good sales estimates for B.U. LLC, rap?
a. Yes; the parameter estimates have expected signs, the individual coefficients (besides the intercept) are statistically significant at the 5% level, and the R2R2 is high.
b. Yes, except that the R2R2 is too low to be convincing. The rest of the results (p-values, expected signs) are satisfactory.
c. No; the estimated coefficient for R2R2 should be positive, not negative.
d. No; though the R2R2 is good and the variables have the expected signs, the estimated coefficients are not statistically significant at the 10% level.
Now assume that the income is $35,000, the price of the related good is $17, and B.U. chooses to set the price of its product at $15.
What is the estimated number of units sold given the data above? (Round to the nearest single unit; i.e., no decimals).
What are the values for the own-price (EE), income (EMEM), and cross-price (EXR◂◽.▸EXR) elasticities?
a. E=−0.23E=−0.23, EM=−1.67◂=▸EM=−1.67, EXR=1.21◂◽.▸EXR=1.21
b. E=−0.385E=−0.385, EM=1.237EM=1.237, EXR=0.295◂◽.▸EXR=0.295
c. E=−1.22E=−1.22, EM=2.09EM=2.09, EXR=−0.87◂◽.▸EXR=−0.87
d. E=−4.582E=−4.582, EM=0.0063EM=◂#▸0.0063, EXR=3.085◂◽.▸EXR=3.085
If PP increases by 4%, what would happen (in percentage terms) to quantity demanded?
a. QQ changes by 4%×−0.386=−1.54%4%◂=▸×−0.386=−1.54%
b. QQ decreases by 4%4%.
c. QQ decreases by 0.478%0.478%.
d. QQ increases by 4%×−4.582=−0.183%4%◂=▸×−4.582=−0.183%
If MM increases by 3%, what would happen (in percentage terms) to quantity demanded?
a. QQ increases by 3%×3%=0.09%◂,▸3%×3%=0.09%.
b. QQ falls by 0.6%.
c. QQ increases by 3%×1.239=3.72%◂,▸3%×1.239=3.72%.
d. QQ decreases by 3%×−0.478=−0.0143%◂=▸×−0.478=−0.014.
If RR decreases by 5%, what would happen (in percentage terms) to quantity demanded?
a. QQ falls by 1.48%.
b. QQ falls by 5%×3.085=0.154%◂,▸5%×3.085=0.154%.
c. QQ decreases by 6.22%.
d. QQ increases by 28.4%.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more