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Found similar question but with no answers - please send link A manufacturer of computer workstations gathered average monthly sales figures from 56
Found similar question but with no answers - please send link
A manufacturer of computer workstations gathered average monthly sales figures from
56 branch offices and dealerships across the country (all data were collected at the
same date) and estimated the following demand for its product:
Q = 15,000 – 2.80 P + 150 A + 0.3 PPC + 0.35 Pm + 0.2 Pc ,
(5,234) (1.29) (175) (0.12) (0.17) (0.13)
R-squared = 0.68 SEE = 786 F = 21.25
Q = quantity;
P = price of basic model (=7,000);
A = advertising expenditures, in thousands (=52);
PPC = average price of a personal computer (=4,000);
Pm = average price of a minicomputer (=15,000);
Pc = average price of a leading competitor’s workstation (=8,000);
a) Compute the elasticities for each of the variables. Discuss the relative impact thateach variable has on demand. What implications do these calculations have for thefirm’s marketing and pricing policies?b) Discuss the statistical significance of each coefficient. Explain whether a one-tail ortwo-tail test is required.