MANAGERIAL ECONOMICS (ECO404)
ASSIGNMENT NO. 1
DUE DATE: 22 NOVEMBER 2012
Mr. Ahmad starts his business by opening a fast food restaurant named ABC chicken burgers. He has his competitor named XYZ chicken burgers in the same locality. Along with this business, he is also studying managerial economics in a private institute that’s why he realizes the importance of elasticity in the business field. He knows that elasticity plays very important role in business decision making. He wants to apply the knowledge of managerial economics in his business for profit maximization that’s why he is eager to estimate various types of elasticity for his product with respect to the factors that affect the demand of his product like price, income, price of substitutes, price of compliments, advertising etc.
For this purpose, he collects the data and estimates the following regression equation:
QABC = 1.8 - 5.2PABC + 0.9Y + 2.01PXYZ – 0.64PC + 1.25A
QABC = Sales of ABC burgers per year
PABC = Price of ABC burgers in rupees
Y = Disposable personal income in rupees per year
PXYZ = Price of the competitive XYZ burgers in rupees
PC = Price of chicken
A = Advertising expenditures for ABC burgers in rupees per year
If PABC = Rs.90, Y = Rs.10, 000, PXYZ = Rs.85, PC = Rs.130, and A = Rs.100, then calculate:
a) Sales of ABC burgers per year
b) Price elasticity of demand (EP) for ABC burgers
c) Income elasticity of demand (EY)for ABC burgers
d) Cross price elasticity of demand (EABC.XYZ) for ABC burgers with respect to the price of XYZ burgers
e) Cross price elasticity of demand (EABC.C) for ABC burgers with respect to the price of chicken
f) Elasticity of demand (EA) with respect to the advertising expenditures
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Assignment No.1 Fall 2012 Solution Eco 404
Tariq ap k complt answers sahi hai bs EABC,XYZ ka answer wrong hai again check karyn ... is ka answer 0.0195 hai...check it and confirm me...
Usman dar kindly share your idea regading to solution of the assignment ................. Need to understand Formulas................... ?
Yara complete solution share karo because agar kesse ka wrong ho ga tu wo at least discuss tu kar sakta hai............ So kindly share complete solution on early basis.........
+ M.Tariq Malik + share complete idea solution................. So we can discuss this assignment.............
ye kase ap nay calculate kiya hai kindly plz bta daye]
Please Discuss here about this assignment.Thanks
Our main purpose here discussion not just Solution
Any idea solution?
tariq bhi plz discuss or kare kuch samaj nahe a rha
Ye uper values ap nay kase calculate kar li tell me plz
ye uper wale values kase calculate hue hai tariq bhi plz tel me