14. The XYZ company is a producer of dishwashers. The company's marketing department has estimated the following demand curve for the company's best-selling model in one of its regions. Q = 2000 - 4P + 6A + 51 + 5PC - 4AC where Q = Number of dishwashers demanded P = $600; Price of dishwashers A = $150; Advertising expenditures (thousands) 1 = $50; GDP per capita (thousands) PC = $500; Competitor's price AC = $200; Competitor's advertising expenditures (thousands) What should be the change in to offset the decrease in by $50? (Note: if there is a decrease, you must have a minus (-) sign in front of your numerical answer with no space and do not use the dollar sign, e.g. a drop of $50 would be -50.) 15. The XYZ company is a producer of dishwashers. The company's marketing department has estimated the following demand curve for the company's best-selling model in one of its regions. Q = 2000 - 4P + 6A + 51 + 5PC - 4AC where Q = Number of dishwashers demanded P = $600; Price of dishwashers A = $150; Advertising expenditures (thousands) 1= $50; GDP per capita (thousands) PC = $500; Competitor's price AC = $200; Competitor's advertising expenditures (thousands) In response to competitor's strategy of reducing by $50, suppose the company does not want to change . By how much should the company change its advertising expenditure to keep sales at the same level? (Note: if there is a decrease, you must have a minus (-) sign in front of your numerical answer with no space and do not use the dollar sign, e.g. a drop of $50 would be -50.) 16. The XYZ company is a producer of dishwashers. The company's marketing department has estimated the following demand curve for the company's best-selling model in one of its regions. Q = 2000 - 4P + 6A + 51 + 5PC - 4AC where Q = Number of dishwashers demanded P = $600; Price of dishwashers A = $150; Advertising expenditures (thousands) 1 = $50; GDP per capita (thousands) PC = $500; Competitor's price AC = $200; Competitor's advertising expenditures (thousands) If the government increases the sales tax by 1 percent, what will be the sale price of dishwashers after the tax (assume that the elasticity of demand is equal to the elasticity of supply in absolute value). 17. The ABC movie theater has 300 seats. In a typical month, 25 percent of the seats are sold. The price elasticity is estimated to be -0.9. The price of a ticket is $8.00. The manager wants to increase the attendance to 30 percent. What price should he charge per ticket? (Note: Use the arc elasticity formula and do not put the dollar sign in your answer.)18. The ABC movie theater has 300 seats. In a typical month, 25 percent of the seats are sold. The price elasticity is estimated to be -0.9. The price of a ticket is $8.00. The manager wants to increase the attendance to 30 percent. What price should he charge per ticket? (Note: Use the arc elasticity formula.) Changing the price charged per ticket to achieve 30 percent attendance is a good strategy. a. True b. False 19. One of the leading laptop manufacturers has estimated the following demand equation based on the data from its 50 branch offices and dealerships across the country: Q = + 10,000 - 60P + 300A + 50 - 100+50 | (7400) (25) (120) (22) (68) (28) R2 = 0.74 F = 28.56 The variables and their assumed values are Q = Quantity P = Price of basic model = 500 A =Advertising expenditures = 50 Pc =Average price of the competitor's product = 600 Ac =competitor's advertising expenditures = 30 I = per capita income = 75 For each of the following, compute the elasticity and then choose the correct interpretation of that elasticity from the following menu. i. Demand is Elastic increasing price would increase revenue ii. Inferior Good ili. Demand is inelastic, decreasing price would decrease revenue iv. Sales are not responsive to advertising v. Normal goods and sales are not affected by the business cycle vi. Sales are not responsive to competitors advertising vii. Sales are responsive to advertising to some degree vili. Substitute ; Signifiant effet on sales ix. Substitute ; insignifiant effet on sales x. Sales are responsive to competitors advertising to some degree xi. Normal Goods and sales are not affected much by the business cycle a. Price of basic Model a. COMPUTE elasticity b. choose the correct interpretation of that elasticity b. Advertising Expenditures? a. COMPUTE elasticity b. choose the correct interpretation of that elasticity c. Average Price of the competitor's product? a. COMPUTE elasticity b. choose the correct interpretation of that elasticity d. competitor's advertising expenditures? a. COMPUTE elasticity b. choose the correct interpretation of that elasticity e. per capita income? a. COMPUTE elasticity b. choose the correct interpretation of that elasticity20. One of the leading laptop manufacturers has estimated the following demand equation based on the data from its 50 branch offices and dealerships across the country: Q = + 10,000 - 60P + 300A + 50 - 100+50 1 (7400) (25) (120) (22) (68) (28) R2 = 0.74 F = 28.56 The variables and their assumed values are Q = Quantity P = Price of basic model = 500 A =Advertising expenditures = 50 Pc =Average price of the competitor's product = 600 Ac= competitor's advertising expenditures = 30 I = per capita income = 75 The best strategy for this firm to increase its market share is to cut its price of the basic model. Select one: a. True b. False 21. One of the leading laptop manufacturers has estimated the following demand equation based on the data from its 50 branch offices and dealerships across the country: Q = + 10,000 - 60P + 300A + 50 - 100+50 1 (7400) (25) (120) (22) (68) (28) R2 = 0.74 F = 28.56 The variables and their assumed values are Q = Quantity P = Price of basic model = 500 A =Advertising expenditures = 50 Pc =Average price of the competitor's product = 600 Ac = competitor's advertising expenditures = 30 I = per capita income = 75 For each variable listed below, indicate whether it is or it is not statistically significant. a. Price of basic Model i. Statistically significant Not Statistically significant b. Advertising Expenditures? i. Statistically significant ii. Not Statistically significant C. Average Price of the competitor's product? i. Statistically significant ii. Not Statistically significant d. competitor's advertising expenditures? i. Statistically significant ii. Not Statistically significant e. per capita income? i. Statistically significant ii. Not Statistically significant 22. According to a study, the price elasticity of jewelry is 1.2 and its income elasticity is 1.5 in the U.S. What would be expected to happen to the total quantity of jewelry sold in the U.S. if incomes fall by 10 percent? (Note: your answer should just be a number with no percent sign. Additionally, if the answer is a decrease, you need a minus (-) sign, e.g., a decrease of 5% would be -5.)