Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Wilpen Company, a price- setting firm, produces nearly 80 percent of all tennis balls purchased in the United States. Wilpen estimates the U. S. demand for its tennis balls by using the following linear specification:
Q = a + bP + cM + dPR
where Q is the number of cans of tennis balls sold quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumers' average household in-come, and PR is the average price of tennis rackets. The regression results are as follows:

DEPENDENT VARIABLE: Q R- SQUARE F- RATIO P- VALUE ON F OBSERVATIONS: 20 0.8435 28.75 0.001
PARAMETER STANDARD
VARIABLE ESTIMATE ERROR T- RATIO P- VALUE
INTERCEPT 455120.0 220300.0 1.93 0.0716
P -37260.6 12587 -22.96 0.0093
M 1.49 0.3651 4.08 0.0009
PR -1456.0 460.75 -3.16 0.0060

a. Discuss the statistical significance of the parameter estimates b, c, and d using the p-values. Given the signs of c and d, please comment on the good category of tennis ball and its relationship with tennis rackets.

Wilpen plans to charge a wholesale price of $1.65 per can. The average price of a tennis racket is $110, and consumers' average household income is $24,600.

b. What is the estimated number of cans of tennis balls demanded?

c. At the values of P, M, and PR given, what are the estimated values of the price (E), income (EM), and cross- price elasticities (EXR) of demand?

d. What will happen, in percentage terms, to the number of cans of tennis balls demanded if average household income increases by 20 percent?

e. What will happen, in percentage terms, to the number of cans of tennis balls demanded if the average price of tennis rackets increases 25 percent?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M946358

Have any Question? 


Related Questions in Microeconomics

Assignmentpart idirections read the prompts below and

Assignment PART I Directions: Read the prompts below and formulate a response of at least one half of one page in length for each question. Please show Your references on a reference page 1. Explain records checks. List ...

Implicit and explicit costs economic problemsproblem achoco

Implicit and Explicit Costs: Economic Problems Problem A Choco Delite is a manufacturer of fine chocolates. Its monthly rental expense is $1,000,000. It also has $2 million in fixed labor costs. Its marginal costs are $. ...

You are an economic consultant and encounter a firm with

You are an economic consultant and encounter a firm with the following data: Quantity of Labor Fixed Costs Variable Costs Total Costs Quantity Marginal Costs 5 $150 20 6 $150 28 7 $150 34 8 $150 38 The wage rate is $8 pe ...

New jersey human servicesassignment evaluation of the

NEW JERSEY HUMAN SERVICES Assignment: Evaluation of the Agency's Budgeting and Cumulative Report As a consultant, you need to develop an in-depth analysis and evaluation of the selected agency's budgeting and then provid ...

Assignmentfirms use inputs workers machinery natural

Assignment Firms use inputs (workers, machinery, natural resources) to produce outputs (goods and services). For example: General Motors uses steel, rubber and other materials to create automobiles. A pizza restaurant tu ...

Assignmentvirtually all general managers face

Assignment Virtually all general managers face capital-budgeting decisions in the course of their careers. The most common of these is the simple "yes" versus "no" choice about a capital investment. Regardless of the typ ...

Instruction please answer all questions all questions carry

Instruction: Please answer ALL questions. All questions carry equal marks. Please do not write over 2000 words for the entire assignment. 1. a. Using the graph shown, analyze the effect a $300 price ceiling would have on ...

Problem -the table below gives the income of each of four

Problem - The Table below gives the income of each of four individuals who are in a region. Calculate and plot the Lorenz curve and calculate the Gini coefficient for this economy. individual income 1 100 2 200 3 300 4 4 ...

Q1 in quantity theory of money model mv py assume that v

Q1. In quantity theory of money model, MV = PY, assume that V is constant, M is growing at 6% per year, Y is growing at 3%. a. If r = 2, what is i? b. If the Fed reduces the money growth rate by 2% points per year, what ...

Assignment sustainability at top shelf shoesin this course

Assignment: Sustainability at Top Shelf Shoes In this course, you will work independently to analyze sustainability issues for a hypothetical organization. The assignments follow one another so that you can apply the met ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro