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# ECO404 1st Assignment fall 2012

MANAGERIAL ECONOMICS (ECO404)
FALL 2012
ASSIGNMENT NO. 1
DUE DATE: 22 NOVEMBER 2012
MARKS: 30
ASSIGNMENT:
The Case:
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
Where,
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
Requirement:
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
(Marks: 5+5+5+5+5+5)
Outcomes:
IMPORTANT:
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### Replies to This Discussion

plz koye idea solution in values ka daye daye plz

plz tariq bhi sales of burger waly question send karo

khuda kay waste complete solution at least bta daye agar koye mistake ho ge to check he kar laye gaye

phle bar vu ning per assignment ka solution nahe mila

formula hai 1st ko chor kar ok.

Eabc,Ey,Eabc,xyz,Eabc,c or Ea = dQabc/dPabc,Y,Pxyz,Pc or A * Pabc,Y,Pxyz,Pc or A /Qabc.

One by one apply kar lyn ok and 1st one me just jo formula diya gaya hai value put kar k calculate kar lo...ok nw..

aur kindly kisi ka subject MGT602 hai jo add me at my mailing address and also send me the idea solution email: usman.master1@gmail.com.

ye ap nay ikhta aik he formula likha hai kay alag alag hai plz ye bta daye

usman kiya ap plz formula bta sakte hai in kay may nay leeson no 6 ka page no 32 study kiya hai per unho nay direct formule may value put kar di hai kiya ap only formule bta sakte hai kay kon say apply ho gaye plz

Dear All,

This is the solution

QABC=1.8-5.2(90)+0.9(10000)+2.01(85)-0.64(130)+1.25(100)=8745
EP = -5.2 (90/8745) = ?
EY = 0.9(10000/8745) = ?
EABC.XYZ=2.01(85/8745) = ?
EABC.C=0.64(130/8745) = ?
EA=1.25(100/8745) = ?

Thanks.

MC100403064

wrong hai solution

i email to madam and madam says  this is 30 marks assignment so show also formula for each solution you in the above solution only put the values and not apply formula and your marks are deducted

kisi nay solution kar liya hai kay nahe

Ayaz Yasub Kindly app formulas hee send kar do yar....................... Yeahee tu faida hai is forum ka app sab kuch discuss karin................. So kindly app Formulas share karin sab kay sath..........

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