Essay On Demand And Demand

Demand and Supply In the economic world, have you ever thought of how demand estimation can be calculated and interpreted as it relates to a regression equation? Well, let me start by defining what demand estimation mean. Demand estimation is a process that involves coming up with an estimate of the amount of demand for a product or service within a particular period of time (Arthur, 2016). For the month of April, having the privilege to work for a maker of a leading brand of low-calorie, frozen microwavable food; while collecting the data from 26 supermarkets around the country has been an interesting experience. The data consist of a regression equation that includes:
QD = -3,750 - 100P + 25A + 50PX + 8Y
(5,234) (2.29) (525) (1.75) (1.5)
R2 = 0.90 n = 26 F = 35.25
P (in cents) = 300 cents per unit (price per unit)
PX (in cents) = 200 cents per unit (price of leading competitor’s product)
Y (in dollars) = $10,000 (per capita income in the Standard Metropolitan Statistical Area)
A (in dollars) = $750 (monthly advertising expenditures) Therefore, the elasticities for each independent variable will need to be computed as follow because this will provide the breakdown of how each variable will represent within

Also, this will implicate the demand for the price and give a negative output of -0.4, in which this will cause the coefficient of ( P) for the microwavable food to be classified as inelastic. The cross price elasticity will reveal a substitute good because when the product price rises, the demand for our good goes up and the competitors in the marketplace will lose customers. The coefficient of (PX) equals 0.13. In fact, when the demand for competitors increases their price, our firm will continue to gain customers, so the larger the outcome, the better effect it will have on the demand of the product