Calculate the price
of
your order:

275 words
+
Approximate price
$ 0.00

Problems

Problems

3.  (a) Starting with the estimated demand function for Chevrolets given in problem 2, assume that the average value of the independent variables changes to N=225 million, I=$12,000, PF=$10,000, PG=100cents, A=$250,000, and PI=0 (i.e., the incentives are phased out).  Find the equation of the new demand curve for Chevrolets.  * Revised 3(b):  If Pc is $10,000, find the value of Qc.

Function from Problem 2 is:

Qc= 100,000-100Pc+ 2,000N + 50I + 30Pf – 1,000Pg +3A + 40,000Pi

7.  The total operating revenue of a public transportation authority are $100 million while its total operating cost are $120 million.  The price of a ride is $1, and the price elasticity of demand for public transportation has been estimated to be -.04.  By law, the public transportation authority must take steps to eliminate its operating deficit.  (a) is asking should the transportation authority increase or decrease the price per ride based upon the price elasticity of demand. (b) Use equation (3-7.)  Suggestion: increase the price of a ride to be $1.50. 

your situation, I’ll explain it briefly here.

14.  Suppose that a firm maximizes its total profits and has a marginal cost (M/C) of production of $8 and the price elasticity of demand for the product sells is (-)3.  Find the price at which the firm sells the product.  *** Use equation (3-12) and to maximize the profits, MR has to equal MC.

 

Chapter 5

Discussion

 

15.  Integrating Problem.  Starting with the data for Problem 6 and the data on the price of a related commodity for year 1986 to 2005 given below, we estimated the regression for the quantity demanded for a commodity (which we now relabel ÔX), on the price of the commodity (which we now relabel PX), consumer income (which we now lable Y), and the price of the related commodity (PZ), and we obtain the following results.  (If you can, run this regression yourself; you should get results identical or very similar to those given below.

 

 

Year

1986

1987

1988

1989

1990

Pz ($)

14

15

15

16

17

Year

1991

1992

1993

1994

1995

Pz ($)

18

17

18

19

20

Year

1996

1997

1998

1999

2000

Pz ($)

20

19

21

21

22

Year

2001

2002

2003

2004

2005

Pz ($)

23

23

24

25

25

 

ÔX = 121.86-9.5PX+0.04Y-2.21PZ

                       (-5.12)  (2.18)   (-0.68)

R2=0.9633    F= 167.33  D-W = 2.38

 

15(b) is to evaluate the above regression results in terms of the signs of the coefficients, the statistical significance of the coefficients and the explanatory power of the regression (R2)  The number in parentheses below the estimated slope coefficients refer to the estimated t values.  The rule of thumb for testing the significance of the coefficients is if the absolute t value is greater than 2, the coefficient is significant, which means the coefficient is significantly different from zero.  For example, the absolute t value for Px is 5.12 which is greater than 2, therefore, the coefficient of Px, (-9.50) is significant.  In order words, Px does affect Qx. If the price of the commodity X increases by $1, the quantity demanded (Qx) will decrease by 9.50 units.

  

15(c) X and Z are complementary or substitutes?

 

 

Basic features

  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support

On-demand options

  • Writer's samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading

Paper format

  • 275 words per page
  • 12pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, CHicago/Turabian, Havard)

Guaranteed originality

We guarantee 0% plagiarism! Our orders are custom made from scratch. Our team is dedicated to providing you academic papers with zero traces of plagiarism.

Affordable prices

We know how hard it is to pay the bills while being in college, which is why our rates are extremely affordable and within your budget. You will not find any other company that provides the same quality of work for such affordable prices.

Best experts

Our writer are the crème de la crème of the essay writing industry. They are highly qualified in their field of expertise and have extensive experience when it comes to research papers, term essays or any other academic assignment that you may be given!

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

error: Content is protected !!
Open chat
1
Reliance Papers Inc.
Get Help With All Your Homework Questions. Any Deadline, Affordable, Quality Work Guaranteed!!