Economics 2163A/B Chapter 3: Chapter 3 answers
10 Jan 2013
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Given the available information, the own price elasticity. Since of demand for major cellular telephone manufacturer is this number is greater than one in absolute value, demand is elastic. By the total revenue test, this means that a reduction in price will increase revenues. 06. 8: using the change in revenue formula for two products, million. The regression output (and corresponding demand equations) for each state are presented below: While it appears that demand slopes upward, note that coefficient on price is not statistically different from zero. An increase in income by ,000 increases demand by 14. 32 units. Since the t-statistic associated with income is greater than 2 in absolute value, income is a significant factor in determining quantity demanded. The r-square is extremely low, suggesting that the model explains only 9 percent of the total variation in the demand for kbc microbrews. Factors other than price and income play an important role in determining quantity demanded.
