# BUS 446 Week 4 Assignment

Topics: Regression analysis, Microwave oven, Per capita income Pages: 4 (632 words) Published: November 2, 2014

This file includes BUS 446 Week 4 Assignment Just-In-Time Deadline: ( ), Business - Management
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 at http://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 + .20A + .25M
(2.002)  (17.5) (6.2)  (2.5)  (0.09)  (0.21)

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 cents per 3-pack unit
PX (in cents)  =  Price of leading competitor’s 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 ,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)

Your supervisor has asked you to compute the elasticities for each independent variable. Assume the following values for the independent variables:

Q  =  Quantity demanded ...

If you have never been...