Eco 550 managerial economics assignment 1 demand estimation

Please use the following equation as your demand function.

QD       =          20,000 – 10P + 1500A + 5PX + 10I

(5,234)  (2.29)   (525)   (1.75)  (1.5)

R2 = 0.85           n = 120             F = 35.25

To compute the elasticities for each independent variable, please use the following values for the independent variables as your starting point:

Q          =          Quantity demanded

P (in cents)       =          Price of the product = 8,000

PX (in cents)     =          Price of leading competitor’s product = 9,000

I (in dollars)       =          Per capita income of the standard metropolitan statistical area

(SMSA) in which the supermarkets are located = 5,000

A (in dollars)     =          Monthly advertising expenditures = 64