Ask Question, Ask an Expert


Ask Microeconomics Expert

A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product:

Q = + 15,000 - 2.80P +150A + 0.3Ppc + 0.35Pm + 0.2Pc
(5,234) (1.29) (175) (0.12) (0.17) (0.13) ? Standard errors of the coefficients
R² = 0.68 SEE = 786 F = 21.25
The variables and their assuming values are:
Q= Quantity
P= Price of basic model = 7,000
A = Advertising expenditures (in thousands) = 52
Ppc = Average price of a personal computer = 4,000
Pm= Average price of a minicomputer = 15,000
Pc= Average price of a leading competitor's workstation = 8,000

a.) Compute the elasticities for each variable. On the basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies?

b.) Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to use a one-tail verse a two-tail test on the results? Discuss the results of the t-tests in light of the policy implications mentioned.

c.) Suppose a manager evaluating these results suggests that interest rates and the performance of the computer (typically measured in millions of instructions per second, or IPS) are important determinants of the demand for workstations and must therefore be included in the study. How would you respond to this suggestion? Elaborate.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M947981

Have any Question? 

Related Questions in Microeconomics

Assignmentyou have been offered a paralegal position with a

Assignment You have been offered a paralegal position with a firm in Raleigh, NC. A local winemaker has contacted your firm for legal assistance. No one in the firm knows anything about this subject but would like to exp ...

Question should insider directors constitute the majority

Question: Should insider directors constitute the majority of a corporate board instead of investors?

1 firms that had virtual monopolies that is control over at

1. Firms that had virtual monopolies, that is control over at least 80% of industry production, because of control over an essential resource include all of the following except the A) National Football League in the 195 ...

Milestone guidelinesthe purpose of this milestone is for

Milestone Guidelines The purpose of this milestone is for students to explore the various costs their firm faces and to describe their firm's market. Using the concepts and tools developed in Modules Four and Five, stude ...

Question 1 suppose you are given the following information

Question 1: Suppose you are given the following information about an industry: Q D = 8000 - 100p; Q S SR = 20 + 700p; c(q) = 20 + q 2 /20. where q and c (q) stand for a firm's quantity supplied and cost function; Q S SR ...

Success and failurethink about the causes of success and

Success and Failure Think about the causes of success and failure for particular movements. What causes some to become widely appealing and have major impacts on change? What causes others (regardless of the validity of ...

Price elasticity amp income elasticity research in an

Price Elasticity & Income Elasticity Research in an Economic Crisis Environment The last few years most of the countries worldwide are experiencing a heavy economic crisis that is affecting heavily national consumption a ...

Brainy brian eco discussiondiscussion topic is the lost

Brainy Brian ECO discussion Discussion topic is The Lost Decade: Needs to be 150-250 words and one or two citations. No cover page is needed Aggregate expenditure is the total amount of spending in the economy that deter ...

Discuss the security issues in addition to simple customs

Discuss the security issues (in addition to simple customs requirements) that your company must consider when transporting customers' goods across international borders. Do the markets your company usually serves make th ...

Organisation theory multiple perspectivesconcepts you

Organisation Theory: Multiple Perspectives Concepts you should know: a. Communities of Practice b. Social Learning c. Institutionalisation Discussion questions: a. Are the concepts of communities of practice and social l ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate