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ECO 550 - Assignment 1 Week 3

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Question;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.;Faculty Note:Prior;to Week 1, you will selectone (1);of thetwo (2) following equation;options for students to use in order to complete this assignment.;Copy;and paste the selected equation option into an MS-Word document.;Attach;the MS-Word document with the selected equation to Assignment 1 within the;course shell.;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);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 prices are 100, 200, 300, 400;500, 600 cents.;a);Plot;the demand curve for the firm.;b);Plot;the corresponding supply curve on the same graph using the following MC/supply;function Q = -7909.89 + 79.0989P with the same prices.;c);Determine;the equilibrium price and quantity.;d);Outline;the significant factors that could cause changes in supply and demand for the;product. 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.;Indicate;the crucial factors that could cause rightward shifts and leftward shifts;of the demand and supply curves.;Use;at least three (3) quality academic resources in this assignment. Note: Wikipedia does not qualify;as an academic resource.;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.;Apply the;concepts of supply and demand to determine the impact of changes in market;conditions in the short run and long run, and the economic impact on a;company?s operations.;Use technology;and information resources to research issues in managerial economics and;globalization.;Write clearly;and concisely about managerial economics and globalization using proper;writing mechanics.;Grading;for this assignment will be based on answer quality, logic / organization of;the paper, and language and writing skills, using the following rubric.;Points;200;Assignment;1:Demand;Estimation;Criteria;Unacceptable;Below;70% F;Fair;70-79%;C;Proficient;80-89%;B;Exemplary;90-100%;A;1.;Compute the elasticities for each independent variable.Note: Write down all of your calculations.;Weight;15%;Did;not submit or incompletely computed the elasticities for each independent;variable.;Partially;computed the elasticities for each independent variable.;Satisfactorily;computed the elasticities for each independent variable.;Thoroughly;computed the elasticities for each independent variable.;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.;Weight: 15%;Did;not submit or incompletely determined the implications for each of the;computed elasticities for the business in terms of short-term and long-term;pricing strategies. Did not submit or incompletely provided a rationale in;which you cite your results.;Partially;determined the implications for each of the computed elasticities for the;business in terms of short-term and long-term pricing strategies. Partially provided;a rationale in which you cite your results.;Satisfactorily;determined the implications for each of the computed elasticities for the;business in terms of short-term and long-term pricing strategies.;Satisfactorily provided a rationale in which you cite your results.;Thoroughly;determined the implications for each of the computed elasticities for the;business in terms of short-term and long-term pricing strategies. Thoroughly;provided 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.;Weight;10%;Did;not submit or incompletely recommended whether you believe that this firm;should or should not cut its price to increase its market share. Did not;submit or incompletely provided support for your recommendation.;Partially;recommended whether you believe that this firm should or should not cut its;price to increase its market share. Partially provided support for your;recommendation.;Satisfactorily;recommended whether you believe that this firm should or should not cut its price;to increase its market share. Satisfactorily provided support for your;recommendation.;Thoroughly;recommended whether you believe that this firm should or should not cut its;price to increase its market share. Thoroughly provided support for your recommendation.;4a.;Assume that all the factors affecting demand in this model remain the same;but that the price has changed. Further assume that the changed prices are;100, 200, 300, 400, 500, 600 cents. Plot the demand curve for the firm.;Weight;5%;Did;not submit or incompletely plotted the demand curve for the firm.;Partially;plotted the demand curve for the firm.;Satisfactorily;plotted the demand curve for the firm.;Thoroughly;plotted the demand curve for the firm.;4b.;Assume that all the factors affecting demand in this model remain the same;but that the price has changed. Further assume that the changed prices are;100, 200, 300, 400, 500, 600 cents. Plot the corresponding supply curve on;the same graph using the MC/supply function Q = -7909.89 + 79.0989P with the;same prices.;Weight;5%;Did;not submit or incompletely plotted the corresponding supply curve on the same;graph using the supply function Q = -7909.89 + 79.0989P with the same prices.;Partially;plotted the corresponding supply curve on the same graph using the supply;function Q = -7909.89 + 79.0989P with the same prices.;Satisfactorily;plotted the corresponding supply curve on the same graph using the supply;function Q = -7909.89 + 79.0989P with the same prices.;Thoroughly;plotted the corresponding supply curve on the same graph using the supply;function Q = -7909.89 + 79.0989P with the same prices.;4c.;Assume that all the factors affecting demand in this model remain the same;but that the price has changed. Further assume that the changed prices are;100, 200, 300, 400, 500, 600 cents. Determine the equilibrium price and;quantity.;Weight;5%;Did;not submit or incompletely determined the equilibrium price and quantity.;Partially;determined the equilibrium price and quantity.;Satisfactorily;determined the equilibrium price and quantity.;Thoroughly;determined the equilibrium price and quantity.;4d.;Assume that all the factors affecting demand in this model remain the same;but that the price has changed. Further assume that the changed prices are;100, 200, 300, 400, 500, 600 cents. Outline the significant factors that;could cause changes in supply and demand for the product. 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.;Weight;10%;Did;not submit or incompletely outlined the significant factors that could cause;changes in supply and demand for the product. Did not submit or incompletely determined;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.;Partially;outlined the significant factors that could cause changes in supply and;demand for the product. Partially determined 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.;Satisfactorily;outlined the significant factors that could cause changes in supply and;demand for the product. Satisfactorily determined 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.;Thoroughly;outlined the significant factors that could cause changes in supply and;demand for the product. Thoroughly determined 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.;Weight;10%;Did;not submit or incompletely indicated the crucial factors that could cause;rightward shifts and leftward shifts of the demand and supply curves.;Partially;indicated the crucial factors that could cause rightward shifts and leftward;shifts of the demand and supply curves.;Satisfactorily;indicated the crucial factors that could cause rightward shifts and leftward;shifts of the demand and supply curves.;Thoroughly;indicated the crucial factors that could cause rightward shifts and leftward;shifts of the demand and supply curves.;6.3 references;Weight;5%;No;references provided;Does;not meet the required number of references, some or all references poor;quality choices.;Meets;number of required references, all references high quality choices.;Exceeds;number of required references, all references high quality choices.;7.Writing Mechanics, Grammar, and Formatting;Weight;5%;Serious;and persistent errors in grammar, spelling, punctuation, or formatting.;Partially;free of errors in grammar, spelling, punctuation, or formatting.;Mostly;free of errors in grammar, spelling, punctuation, or formatting.;Error;free or almost error free grammar, spelling, punctuation, or formatting.;8.Appropriate use of APA in-text citations;and reference section;Weight: 5%;Lack;of in-text citations and / or lack of reference section.;In-text;citations and references are provided, but they are only partially formatted;correctly in APA style.;Most;in-text citations and references are provided, and they are generally;formatted correctly in APA style.;In-text;citations and references are error free or almost error free and consistently;formatted correctly in APA style.;9.Information Literacy / Integration of;Sources;Weight;5%;Serious;errors in the integration of sources, such as intentional or accidental;plagiarism, or failure to use in-text citations.;Sources;are partially integrated using effective techniques of quoting, paraphrasing;and summarizing.;Sources;are mostly integrated using effective techniques of quoting, paraphrasing;and summarizing.;Sources;are consistently integrated using effective techniques of quoting;paraphrasing, and summarizing.;10.Clarity and Coherence of Writing;Weight;5%;Information;is confusing to the reader and fails to include reasons and evidence that;logically support ideas.;Information;is partially clear with minimal reasons and evidence that logically support;ideas.;Information;is mostly clear and generally supported with reasons and evidence that;logically support ideas.;Information;is provided in a clear, coherent, and consistent manner with reasons and;evidence that logically support ideas.

 

Paper#57166 | Written in 18-Jul-2015

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