Suppose that a coffee producing firm estimated the following regression of the demand for its brand of coffee:
Qc= 1.5-3 Pc+0.8Y+2Pb-0.6Ps+1.2A
Where Qc = sales of coffee brand C, in dollars per pound
Pc = price of coffee brand C, in dollars per pound
Y = personal disposable income, in millions of dollars per year
Pb = price of the competitive brand of coffee, in dollars per pound
Ps = price of sugar, in dollars per pound
A = advertising expenditures for coffee brand C, in hundreds of thousands of dollars per year.
Suppose also that this year, Pc = $2, Y = $2.5, Pb = $1.80, Ps = $1 and A =$1.
a) Interpret the results of the estimated demand.
b) Compute point price elasticity of demand for the firm’s brand of coffee with respect to its price.
c) Compute the cross-price elasticity of demand for coffee with respect to the price of competitive coffee brand b.
d) At the current price level, would it be viable for the firm to increase the price level of its brand of coffee? Support your answer. (Hint, what effect does an increase in price of the firm’s brand of coffee have on total revenue?)
e) Would you recommend that the firm continues to advertise its product?
Compare degree of pain while on Motrin with degree of pain on placebo during maximal activity.Aug 01 2020
Compare the buoyant force on a ring of artery versus a ring of siti- cone rubber. Assume that each is 4mm in internal diameter, 0.8mm in thickness, and 3 mm in length. ...Aug 19 2020
could the dollar still function as the unit of account in a totally cashless society >May 11 2020
a recent survey of gasoline prices indicated that the national average was $4.098 per gallon. The dallas automobile club claimed that gasoline in texas was significantly ...Apr 06 2020
Merck, a major pharmaceutical, generated $6,168 million in net income for the year ended December 31, 2012. 1. The company declared and paid $5,173 million in dividends d...May 21 2020
What is a perpetual inventory system?Jul 21 2021
Your credit card charges you an 18% nominal rate on any balance outstanding, with daily compounding. What effective annual rate (EFF%) are you being charged?Jul 02 2021
Samuel Green recently joined the investment firm of Yoke Pond Associates as an equity analyst. Yoke Pond specializes in international equity investments. This is his firs...Jul 08 2020
Discuss briefly the pros and cons of biometric authentication.72) Explain how secure sockets layer works when a user communicates securely with a Web site.Dec 23 2019
The plasma protein albumin is made by ________.a. white blood cellsb. red blood cellsc. the heartd. the liverJun 07 2021