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Eco 550 Assignment 1: Demand Estimation

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Eco 550 Assignment 1: Demand Estimation
Assignment 1: Demand Estimation
By
Stephanie Airhart
Eco 550
Dr. Camille Castorina
04/25/2016

Banquet® Frozen Meals Founded in 1940, Banquet is the maker of a leading brand of frozen microwaveable dinners. Started by a schoolteacher that needed extra money, the company began in an old barn selling products to the local merchants. Banquet has been providing excellent meals to families all over the world. The line of food contains everything from fried chicken to crisp apple pies. Banquet takes pride in their affordable meals. The thing the makes them unique is the quality of food for such an affordable price. In today’s society, families have less time to spend together. It is very hard to get everyone together for family meals due to sports, long work hours, and other obligations. Many parents have become more and more dependent on fast foods or microwaveable dinners. These dinners have been the go to for thousands of hungry people. When customers buy these meals, they are looking for something fast, tasty, and affordable. Banquet has been very successful because of their low-cost meal options. The company will need to decide if they want to reduce prices to gain even more success. It wouldn’t make sense if …show more content…
Once the quantity demanded is found, we will be able to find the elasticity of each variable. The equation to find the elasticity of price would be of price = coefficient * price/q. If we plug the numbers into the equation -42*(500/17650), we would have a total of -1.19 for the elasticity of price (P). The total for (PX) would be 20*(600/17650) = .68. We would have a total of 1.62 for the equation of (I), was 5.2*(5500/17650). Variable (A) would be equal to .20*(10000/17650) = .11. Lastly, the equation for (M) was .25*(5000/17650) which was
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