Premium Essay

Econ 550 Demand Estimation

In: Business and Management

Submitted By angarag1
Words 1910
Pages 8
Demand Estimation

Managerial Economics & Globalization – ECO 550

Dr. Lundondo Mumeka
July 17, 2014

Introduction
This assignment is trying to compute the elasticities for each independent variable in a giving regression equation for the demand of a leading brand of low-calorie microwavable food across 26 superstores for the month of April. The linear equation provided is QD = -5200 – 42P + 20 PX + 5.2I + .20A + .25M which suggests that it is dependent on the following variables: * P - Price of the product * PX – Price of the leading competitor’s product. * I – Per capita income of the standard metropolitan statistical area in which the superstores are located. * A – Monthly advertising costs. * M – No. of microwaves sold in the metropolitan areas being considered.
Then determining the implications for each of the computed elasticities for the business in terms of short-term and long-term pricing strategies of the product. And also create the supply and demand curves at different prices to determine the equilibrium price and quantity. Finally, evaluate factors that could impact the rightward / leftward shifts of the demand and supply curves.
Computing the elasticities for each independent variable.
The following data was provided by the professor that needs to be plugged into the Demand equation above to determine the Quantity demanded (QD):
PX = 600 I = 5,500 A = 10,000 M = 5,000
QD = -5200 – 42P + 20 PX + 5.2I + .20A + .25M
QD = -5200 – 42 (500) + 20(600) + 5.2 (5500) + 0.2 (10000) + 0.25(5000)
QD = -5200 – 21000 + 12000 + 28600 + 2000 + 1250
QD = 17650
Quantity demanded (QD) = 17650
Calculation of elasticity for each variable:
PEDP = - 42P / QD = - 42 (500) / 17650 = - 1.19
The other elasticities could be calculated similarly.
PEDPX = 20 (PX) / QD = 20(600) / 17650 = 0.68
PEDI = 5.2 (I) / QD = 5.2(5500) /

Similar Documents

Premium Essay

Making Decisions Based on Demands

...Making Decisions Based on Demand and Forecasting Latonya Woodrow Instructor Name: Dr.Samuel F. Onipede ECO 550 –Managerial Economics and Globalization July 21, 2013 College Students buy pizza in large quantities for a cheap price, but if the prices were to increase, then these same students may look for similar alternatives that will not empty their wallets.   These are possible alternatives that offer a large quantity of food at a reasonable price that can affect the demand of pizza.   However, monitoring the costs of the competing fast food restaurants in the Charlotte, North Carolina, area will allow Domino’s Pizza to offer certain specials and pizza deals to the community that can keep their demand at a high rate. A market demand analysis is used to help understand how much consumer demand there is for a given product or service.   This type of analysis will help determine if a business can successfully enter a market and generate enough revenue and profit to maintain the business.   One must identify the market and the growth potential. Domino’s Pizza was incorporated in 1963 and has been franchising since 1967.   A traditional Domino’s store is located in shopping centers and/or strip malls with appropriate parking for delivery vehicles and walk-in customers for carry-out services...

Words: 1234 - Pages: 5

Premium Essay

Eccon

...Demand Estimation Mayra Perez Dr. Lundondo Mumeka ECON 550 31 July 2014 Demand estimation Elasticity is the ratio whereby one variable changes causing a change in the other one. The variables being considered are independent variable and dependent variable. In the words of Andrew (2007), the percentage change in one variable causes a one percent change in the other variable. Elasticity estimates the relationship in demanded quantity of the product and the price change. The formula for calculating elasticity of demand is demonstrated below; Elasticity of demand = change in demanded quantity / change in price Option One: Quantity demanded = -5200 – 42(166.67) + 20(200) + 20(10000) + 25(5000) = 345399.86 = -5200 – 42(26) + 20(200) + 20(10000) + 25(5000) = 322708 Elasticity of independent variable = (345399.86 – 322708) / (120 – 26) = 199.05 Option 2 Quantity demanded = -2000 – 100(66.67) + 15(640) + 25(100) + 10(5000) = 53433 = -2000 – 100(120) + 15(640) + 25(100) + 10(5000) = 48100 Elasticity of independent variable = (53433 – 48100) / (66.67 – 120) = -100 Implications of the change in elasticity In the first option, the change in price from 166.67 to 26 per unit caused a change in the quantity demanded from 345399.89 to 322708. In the second option, the change in price also caused a change in the quantity demanded. When the price is 66.67 per unit, the quantity demanded is 53433. Change in the price to 120 per unit made the quantity demanded to down to 48100...

Words: 2311 - Pages: 10

Premium Essay

Activity Based Costing in Forging Industry

...AInternational Journal of Production Research, Vol. 46, No. 4, 15 February 2008, 1047–1069 Activity-based costing in flexible manufacturing systems with a case study in a forging industry K. REZAIEy, B. OSTADI*z and S. A. TORABIy yDepartment of Industrial Engineeing, Faculty of Engineering, University of Tehran, PO Box 11365/4563, Tehran, Iran zDepartment of Industrial Engineering, Faculty of Engineering, Tarbiat Modares University, Tehran, Iran (Revision received August 2006) The objective of this paper is to apply the activity-based costing (ABC) approach together with traditional costing (TC) for parts costing in flexible manufacturing systems (FMS) with the A(2) level of automation. We propose a new model for the implementation of ABC using the product cost tree concept. First, the required resources and activities for each part are recorded, and then their costs are calculated using the appropriate cost formulae. This model was applied in a forging industry. A comparison and analysis between ABC and TC was then carried out based on the computational results obtained from the case study. The results indicate that the ABC outputs are more reliable than the TC outputs, and thus the ABC approach is a more acceptable tool for parts costing in FMS. Keywords: Costing; Activity-based costing; Cost management; Flexible manufacturing; Product cost tree concept 1. Introduction Increasing worldwide competition has forced manufacturing organizations to seek to produce high-quality...

Words: 9004 - Pages: 37

Free Essay

Customer Satisfaction

...Transforming Lives Communities The Nation …One Student at a Time Disclaimer Academic programmes, requirements, courses, tuition, and fee schedules listed in this catalogue are subject to change at any time at the discretion of the Management and Board of Trustees of the College of Science, Technology and Applied Arts of Trinidad and Tobago (COSTAATT). The COSTAATT Catalogue is the authoritative source for information on the College’s policies, programmes and services. Programme information in this catalogue is effective from September 2010. Students who commenced studies at the College prior to this date, are to be guided by programme requirements as stipulated by the relevant department. Updates on the schedule of classes and changes in academic policies, degree requirements, fees, new course offerings, and other information will be issued by the Office of the Registrar. Students are advised to consult with their departmental academic advisors at least once per semester, regarding their course of study. The policies, rules and regulations of the College are informed by the laws of the Republic of Trinidad and Tobago. iii Table of Contents PG 9 PG 9 PG 10 PG 11 PG 11 PG 12 PG 12 PG 13 PG 14 PG 14 PG 14 PG 14 PG 15 PG 17 PG 18 PG 20 PG 20 PG 20 PG 21 PG 22 PG 22 PG 22 PG 23 PG 23 PG 23 PG 23 PG 24 PG 24 PG 24 PG 24 PG 25 PG 25 PG 25 PG 26 PG 26 PG 26 PG 26 PG 26 PG 26 PG 27 PG 27 PG 27 PG 27 PG 27 PG 27 PG 28 PG 28 PG 28 PG 28 PG 28 PG 33 PG 37 Vision Mission President’s...

Words: 108220 - Pages: 433

Premium Essay

Gems and Jewellery's

...Disclaimer for the Skill Gap Report: NSDC engaged IMaCS (ICRA Management Consulting Services Limited) to prepare this report, which is based on independent research and analysis done by IMaCS. This report is not based or derived from any other report or research paper. Any similarity with any other paper may purely be a co-incidence. All rights reserved. All copyright in this report and related works is solely and exclusively owned by NSDC. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of NSDC. This report is for information purposes only. While due care has been taken during the compilation of this report to ensure that the information is accurate to the best of IMaCSs’ and NSDC’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. IMaCS and NSDC neither recommend nor endorse any specific products or services that may have been mentioned in this report and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed in this report. Neither IMaCS nor NSDC shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to...

Words: 16187 - Pages: 65

Premium Essay

Paper

...INTRODUCTION TO MACROECONOMICS E202 $ ¥ Dr. David A. Dilts Department of Economics Doermer School of Business and Management Sciences Indiana-Purdue University-Fort Wayne June 1, 1993 Revisions: May 1994, December 1995, July 1996, November, 2000, May 2003, May 2006 PREFACE This Course Guide was developed in part because of the high cost of college textbooks, and in part, to help organize students’ studying by providing lecture notes together with the reading assignments. This Guide is provided to the student online at the Department of Economics website. Jayla Heller, the Department’s secretary has been kind enough to go through all of the frustration and hard work to put the guide in the appropriate format and put it online. To her goes my gratitude. The department, neither school, nor the professor make anything whatsoever from this Guide. In fact, the department’s budget and the professor’s own resources are used in the writing of the Guide, and the numerous draft copies that are produced in the revisions of this document. Like the sign in the Mom and Pop bait shop on Big Barbee Lake says, “This is a non-profit organization, wasn’t planned to be – it just worked out that way.” Well, actually it was planned to be a non-profit enterprise in this case. The professor also wishes to acknowledge the fact that several students have proposed changes, improvements, caught errors, and helped to make this document more useful as a learning tool. Naturally, any errors of omission...

Words: 56767 - Pages: 228

Premium Essay

Wns Hand Book123

...Student Handbook 2012 WELCOME TO WAIKATO Welcome to the University of Waikato. I hope you make the most of your time here and the opportunities that will present themselves during the course of your study. You have come to an excellent university that is ranked top in 10 subjects under the Government’s Performance Based Research Fund. We are also internationally connected; we have research connections and student exchanges with some of the world’s top universities. I urge you to consider taking part in these while you are with us. Here at the University of Waikato, you will be taught by lecturers who are leaders in their fields of research and who win national teaching awards. We are proud of our academic quality and the fact that we turn out sought-after graduates who go on to take up important roles in all parts of the world. You will already have noticed our beautiful campus which is set in 68 hectares of gardens, green space and lakes. At the heart of it all is the new Student Centre, which was completed in 2011. With its accessible areas, Library services and multitude of facilities, it is a place for students to study or just gather together and we are very proud of this building. In 2011 we celebrated 10 years of another important building, the Gallagher Academy of Performing Arts. This world-class facility was the vision of a group of driven Waikato people. It quickly became a focal point in the campus and continues to be an important venue for the performing...

Words: 126279 - Pages: 506

Premium Essay

Annual Report

...Form 20-F 2011 Nokia Form 20-F 2011   As filed with the Securities and Exchange Commission on March 8, 2012. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 Commission file number 1-13202 (Exact name of Registrant as specified in its charter) Republic of Finland (Jurisdiction of incorporation) Nokia Corporation Keilalahdentie 4, P.O. Box 226, FI-00045 NOKIA GROUP, Espoo, Finland (Address of principal executive offices) Riikka Tieaho, Director, Corporate Legal, Telephone: +358 (0)7 1800-8000, Facsimile: +358 (0) 7 1803-8503 Keilalahdentie 4, P.O. Box 226, FI-00045 NOKIA GROUP, Espoo, Finland (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”): Title of each class Name of each exchange on which registered American Depositary Shares Shares (1) New York Stock Exchange New York Stock Exchange(1) Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission. Securities registered pursuant to Section 12(g) of the Exchange Act: None Securities for which there is a reporting obligation pursuant to Section 15(d)...

Words: 149449 - Pages: 598

Premium Essay

Nokia Annaul Report

...Form 20-F 2011 Nokia Form 20-F 2011   As filed with the Securities and Exchange Commission on March 8, 2012. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 Commission file number 1-13202 (Exact name of Registrant as specified in its charter) Republic of Finland (Jurisdiction of incorporation) Nokia Corporation Keilalahdentie 4, P.O. Box 226, FI-00045 NOKIA GROUP, Espoo, Finland (Address of principal executive offices) Riikka Tieaho, Director, Corporate Legal, Telephone: +358 (0)7 1800-8000, Facsimile: +358 (0) 7 1803-8503 Keilalahdentie 4, P.O. Box 226, FI-00045 NOKIA GROUP, Espoo, Finland (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”): Title of each class Name of each exchange on which registered American Depositary Shares Shares (1) New York Stock Exchange New York Stock Exchange(1) Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission. Securities registered pursuant to Section 12(g) of the Exchange Act: None Securities for which there is a reporting obligation pursuant to Section 15(d)...

Words: 149449 - Pages: 598

Premium Essay

Myypaper

...Salvatore fdedi.tex V2 - 11/10/2012 9:37 A.M. Page iv International Economics Eleventh Edition Dominick Salvatore Fordham University VICE PRESIDENT & EXECUTIVE PUBLISHER EXECUTIVE EDITOR OPERATIONS MANAGER CONTENT EDITOR SENIOR EDITORIAL ASSISTANT CONTENT MANAGER SENIOR PRODUCTION EDITOR ASSOCIATE DIRECTOR OF MARKETING MARKETING MANAGER LEAD PRODUCT DESIGNER SENIOR MEDIA SPECIALIST DESIGN DIRECTOR SENIOR DESIGNER COVER PHOTO CREDIT George Hoffman Joel Hollenbeck Yana Mermel Jennifer Manias Erica Horowitz Lucille Buonocore Sujin Hong Amy Scholz Jesse Cruz Allison Morris Elena Santa Maria Harry Nolan Madelyn Lesure ©lightkey/iStockphoto This book was set in 10/12 Times Roman by Laserwords and printed and bound by R. R. Donnelley-JC. The cover was printed by R. R. Donnelley-JC. Copyright © 2013, 2010, 2007, 2004 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should be addressed to...

Words: 236413 - Pages: 946

Free Essay

Yoyo

...areas that will drive our growth and also create better outcomes for our youthful nation. Strategy at Reliance is about making prudent choices, balancing risks and return, building competitive advantages and envisioning the future through the power of innovation. Innovation has always been a cornerstone of our operations. It has enabled us to make significant technology-driven breakthroughs that add value to existing businesses, and create new ones. We are partnering with leading global institutions renowned for excellence to strengthen our experience and expertise. From the manufacturing landscape to high-growth consumer service sectors, Reliance is making progress possible each day. We are helping the country meet its growing energy demand in a safe and responsible manner, creating value for society through our retail and telecom businesses, widening our community investments for social well-being and elevating the quality of life. Playing a role in creating a happy and prosperous India is our mandate. Because growth is energy. Because growth is value. Because growth is happiness. Because Growth...

Words: 139585 - Pages: 559

Free Essay

Globalisation

...Critical Theories of Globalization Chamsy el-Ojeili and Patrick Hayden Critical Theories of Globalization Also by Chamsy el-Ojeili CONFRONTING GLOBALIZATION: Humanity, Justice and the Renewal of Politics FROM LEFT COMMUNISM TO POSTMODERNISM: Reconsidering Emancipatory Discourse Also by Patrick Hayden AMERICA’S WAR ON TERROR CONFRONTING GLOBALIZATION: Humanity, Justice and the Renewal of Politics COSMOPOLITAN GLOBAL POLITICS JOHN RAWLS: Towards a Just World Order THE PHILOSOPHY OF HUMAN RIGHTS Critical Theories of Globalization Chamsy el-Ojeili Department of Sociology, Victoria University of Wellington, New Zealand Patrick Hayden School of International Relations, University of St Andrews, UK © Patrick Hayden and Chamsy el-Ojeili 2006 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents...

Words: 100030 - Pages: 401

Premium Essay

Shangri La Hotel Singapore

...Annual Report 2012 TABLE OF CONTENTS 2 3 4 6 11 15 15 21 23 24 24 25 29 29 CORPORATE INFORMATION FINANCIAL HIGHLIGHTS CHAIRMAN’S STATEMENT DIRECTORS AND COMPANY SECRETARY SENIOR MANAGEMENT MANAGEMENT DISCUSSION AND ANALYSIS Performance Review Corporate Debt and Financial Conditions Treasury Policies Investment Properties Valuations Financial Assets Held for Trading – Trading Securities Development Programmes Disposal and Dilution of Interest Management Contracts for Hotels Owned by Third Parties 30 30 Prospects Human Resources 185 186 90 92 85 86 87 32 33 62 81 83 CORPORATE SOCIAL RESPONSIBILITY REPORT OF THE DIRECTORS CORPORATE GOVERNANCE REPORT INDEPENDENT AUDITOR’S REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION CONSOLIDATED INCOME STATEMENT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 88 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED CASH FLOW STATEMENT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FIVE YEAR SUMMARY ABBREVIATIONS CORPORATE INFORMATION BOARD OF DIRECTORS Executive Directors Mr KUOK Khoon Ean (Chairman and CEO) Mr LUI Man Shing (Deputy Chairman) Mr Madhu Rama Chandra RAO (CFO) Mr Gregory Allan DOGAN (COO) Non-executive Directors Mr HO Kian Guan Mr Roberto V ONGPIN Mr HO Kian Hock (alternate to Mr HO Kian Guan) Independent Non-executive Directors Mr Alexander Reid HAMILTON Mr Timothy David DATTELS Mr WONG Kai Man Mr Michael Wing-Nin CHIU Professor LI Kwok Cheung Arthur EXECUTIVE COMMITTEE Mr KUOK Khoon...

Words: 64444 - Pages: 258

Premium Essay

Freakonomics-Expanded

...FREAKONOMICS A Rogue Economist Explores the Hidden Side of Everything Revised and Expanded Edition Steven D. Levitt and Stephen J. Dubner CONTENTS AN EXPLANATORY NOTE In which the origins of this book are clarified. vii PREFACE TO THE REVISED AND EXPANDED EDITION xi 1 INTRODUCTION: The Hidden Side of Everything In which the book’s central idea is set forth: namely, if morality represents how people would like the world to work, then economics shows how it actually does work. Why the conventional wisdom is so often wrong . . . How “experts”— from criminologists to real-estate agents to political scientists—bend the facts . . . Why knowing what to measure, and how to measure it, is the key to understanding modern life . . . What is “freakonomics,” anyway? 1. What Do Schoolteachers and Sumo Wrestlers Have in Common? 15 In which we explore the beauty of incentives, as well as their dark side—cheating. Contents Who cheats? Just about everyone . . . How cheaters cheat, and how to catch them . . . Stories from an Israeli day-care center . . . The sudden disappearance of seven million American children . . . Cheating schoolteachers in Chicago . . . Why cheating to lose is worse than cheating to win . . . Could sumo wrestling, the national sport of Japan, be corrupt? . . . What the Bagel Man saw: mankind may be more honest than we think. 2. How Is the Ku Klux Klan Like a Group of Real-Estate Agents? 49 In which it is argued that nothing is more powerful than information,...

Words: 105214 - Pages: 421

Premium Essay

Petronas

...and utilities company, we will continue to see beyond the expected as we transform new opportunities into invigorating growth. ANNUAL REPORT 2 011 LNG Regasification Facilities Project PGB will own and operate the country’s first Liquefied Natural Gas (LNG) Regasification facility which will become commercially operational in 2012. The facilities, strategically located on one of the world’s busiest shipping lane – the Straits of Malacca, will be a key gateway for reinforcing the nation’s energy requirements via regasifying LNG brought in from readily available sources worldwide. Once converted to gas form, the molecules will then be flowed into PGB’s existing Peninsular Gas Utilisation (PGU) pipeline to meet various energy demands. 1 a nnual report 2011 Our Vision, Mission and Shared Values 2 Milestones in the Making 4 Five-Year Financial Highlights 6 Corporate Information 8 Contents Our Operations 10 Our Presence 12 Organisational and Corporate Structure 14 Corporate and Management Directory 15 Board of Directors 16 Performance Review 36 Directors’ Profiles 18 Q&A Q&A with the Chairman 38 Management Committee 26 CEO’s Business Review 48 Management Committee’s Profiles 28 Financial Review 64 Statement of Value Added 70 Performance of Shares 71 Financial Calendar 71 PGB People 72 LNG Regasification Facilities 74 PGB in the News 76 Awards and Achievements 77 Corporate Responsibilities 78 Sustainability - The PGB...

Words: 67627 - Pages: 271