General Cereals is using a regression model to estimate the deamnd for Tweetie Sweeties, a whistle-shaped, sugar-coated cereal for children. The following multiplicative exponential demand function is being used:QD (D is lower to the right)= 6,280P-2.15 A1.05 N3.70 (2.15, 1.05 3.70 are above the letters to the right) where QD= quantity demanded in 10oz. boxes P = price per box, in dollars A = advertising expenditures on daytime television in dollars N= proportion under 12 years old1. Determine the point price elasticity of demand for Tweetie Sweeties2. Determine the advertising elasticity of demand3. What interpretation would you give to the exponent of N?QUESTION #2The demand for haddock has been estimated as:log Q= a+b log P+c log I + d log Pmwhere Q= quantity of haddock sold in New England P= price per pound of haddock I- a measure of personal income in the New England region Pm= an index of the price of meat and poultry1. If b = 2.174, c= 0.461 and d= 1.909:Determine the price elasticity of demandDetermine the income elasticity of demandDetermine the cross price elasticity of demandHow would you characterize the demand for haddock?Suppose disposable income is expected to increase by 5% next year. Assuming all other factors remain constant, forecast the percentage of change in the quantity of haddock demanded next year.Question #3An estimate of the demand function for household furniture produced the following results: F=0.0036Y (1.08 exponent)R(0.16 exponent) P -0.48 (exponent) r2 = 0.996where F= furniture expenditures per household Y= disposable personal income per household R = value of private residential construction per household P= ratio of the furniture price index to the consumer price indexa. Determine the point price and income elasticities for household furniture.What interpretation would you give to the exponent for R? Why do you suppose R was included in the equation as a variable?If you were a supplier to the furniture manufacturer, would you have preferred to see the analysis performed in physical sales units rather than dollars of revenue? How woul dthis change alter the interpretation of the price coeeficient presently estimated as .0.48?
ALL WORK MUST BE SHOWN YOU MUST SHOW HOW THE ANSWER WAS ACHEIVED IT MUST BE DONE BY 4PM EST 4/21/13
