Sunday, 19 June 2016

ECO 550 Week 3 Assignment 1




Assignment 1: Demand Estimation
Due Week 3 and worth 200 points
Imagine that you work for the maker of a leading brand of low-calorie, frozen microwavable food that estimates the following demand equation for its product using data from 26 supermarkets around the country for the month of April.
For a refresher on independent and dependent variables, please go to Sophia’s Website and review the Independent and Dependent Variables tutorial, located athttp://www.sophia.org/tutorials/independent-and-dependent-variables–3.
Option 1
Note: The following is a regression equation. Standard errors are in parentheses for the demand for widgets.
QD       =          – 5200 – 42P + 20PX + 5.2I + 0.20A + 0.25M
(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 of 3-pack units
P (in cents)       =          Price of the product = 500 cents per 3-pack unit
PX (in cents)     =          Price of leading competitor’s product = 600 cents per 3-pack unit
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
Option 2
Note: The following is a regression equation. Standard errors are in parentheses for the demand for widgets.
QD       =          -2,000 – 100P + 15A + 25PX + 10I
(5,234)  (2.29)   (525)   (1.75)  (1.5)
R2 = 0.85           n = 120             F = 35.25
Your supervisor has asked you to compute the elasticities for each independent variable. Assume the following values for the independent variables:
Q          =          Quantity demanded of 3-pack units
P (in cents)       =          Price of the product = 200 cents per 3-pack unit
PX (in cents)     =          Price of leading competitor’s product = 300 cents per 3-pack unit
I (in dollars)       =          Per capita income of the standard metropolitan statistical area
(SMSA) in which the supermarkets are located = $5,000
A (in dollars)     =          Monthly advertising expenditures = $640
Write a four to six (4-6) page paper in which you:
  1. Compute the elasticities for each independent variable.Note: Write down all of your calculations.
  2. Determine the implications for each of the computed elasticities for the business in terms of short-term and long-term pricing strategies. Provide a rationale in which you cite your results.
  3. Recommend whether you believe that this firm should or should not cut its price to increase its market share. Provide support for your recommendation.
  4. Assume that all the factors affecting demand in this model remain the same, but that the price has changed. Further assume that the price changes are 100, 200, 300, 400, 500, 600 cents.
    1. Plot the demand curve for the firm.
    2. Plot the corresponding supply curve on the same graph using the following MC / supply function Q = -7909.89 + 79.1P with the same prices.
    3. Determine the equilibrium price and quantity.
    4. Outline the significant factors that could cause changes in supply and demand for the low-calorie, frozen microwavable food. Determine the primary manner in which both the short-term and the long-term changes in market conditions could impact the demand for, and the supply, of the product.
  5. Indicate the crucial factors that could cause rightward shifts and leftward shifts of the demand and supply curves for thelow-calorie, frozen microwavable food.
  6. Use at least three (3) quality academic resources in this assignment.Note: Wikipedia does not qualify as an academic resource.



 ©Hwacer









Your assignment must follow these formatting requirements:
  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
  • Analyze how production and cost functions in the short run and long run affect the strategy of individual firms.

HSA 525 Assignment 3 Post Merger Analysis, CIS 510 Week 9 Discussion, ECO 550 Week 3 Assignment 1, ECO 550  Assignment 1,  HSA 505 Week 8 Discussion 1, HSA 505 Week 8 Discussion 2, CIS 510 Week 9 Assignment 4, CIS 500 Week 6 Discussion, PAD 525 Week 7 Assignment 3, PAD 525 Week 7 , CIS 500 Week 5 Discussion, CIS 500 Week 4 Discussion, CIS 500 Week 4 Assignment 2, ACC 400 Complete Class, ACC 544 Complete Class, ACC 280 Complete class, ACC 290 Complete Course, BUS 250 Entire Course A Graded, BUS 310 All Week Discussion Questions, BUS 490 Week 4 Assignment 1, BUS 515 Final Exam, CIS 510 Week 2 Assignment 1, CMGT 554 Complete class, CIS 511 Week 1 Assignment 1, CMGT 244 Entire Course, CIS 524 All Week Discussion Questions, CMGT 554 Complete class, CIS 525 Week 10 Term Paper, ECO 410 Test Bank, ECO 415 Complete Course, ENG 125 Week 5 Final Paper, ETH 316 Complete class, FIN 419  Entire class, FIN 515 Week 6 Second Course Project, FIN 534 Midterm Exam, ECO 550 Week 3 Discussion, HCA 210  Complete class, HRM 420 Complete Course, HRM 530 Complete Assignments, MGT 431 Entire Course, MGT 437 Complete Course, MGT 500 Week 3 Assignment 1, MKT 500 Assignment 2 Part B Your Marketing Plan, PHL 458 Complete Class, PSY 322 Complete Class, PSY 390 Complete Class, HSA 510 Week 10. ECE 430 Week 2 Journal, ECE 430 Week 2 Discussion, ECE 430 Week 3 Discussion, ECE 430 WEEK 3 JOURNAL, ECE 430 Week 4 Assignment Informal Assessment Presentation, ECE 430 Week 4 Assignment, ECE 430 Week 4 Discussion, ECE 430 FINAL PROJECT,  ECE 430 Week 5 Discussion, CIS 512 Week 8 Discussion


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