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Given, FlyHigh airlines is test marketing their boxed snacks sold on their short flights. FlyHigh selected 15 different markets for a quarter-long sales test. For

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Given, FlyHigh airlines is test marketing their boxed snacks sold on their short flights. FlyHigh selected 15 different markets for a quarter-long sales test. For the entire quarter, the boxed snack was sold onboard at 4 different prices starting at $8.50 a box. Data was collected on the average income of the passenger aboard the flights. Data was also collected that represented a snack purchased off- board (presumably in the airport) and carried on by the passenger. The amount of passengers that this boxed snack was available to and the ultimate quantity sold was also collected. (a). The selected linear demand function for our forecast will be Quantity sold(Qs)=f{price of snack sold on airplane(P),average income of passenger(Y), price of snack carried by passenger(Ps}.amount of passengers available (Ap)} In other words. Qs:P+Y+Ps+Ap. (b). The estimated linear demand function comes out to be: Qs=5.7263+0.03207 lnY-2.261 lnP+0.0312 lnAp-0.057 lnPs. Here, The demand function is estimated after taking log values of all the variables. This is so because each column varied in units and taking log has helped in making the data in symmetrical units. (c). The percentage variation shown by the demand function is high with 2.26 change in units. This implies that 1%increase in prices will lead to decline in demand to 2.26% of the package. (d). The increase in box price by 2 will ultimately decline it's demand by approximately 2%. Answer: {1). The selected linear demand function for our forecast will be- Quantity sold(Qs)=f{price of snack sold on airplane(P).average income of passenger(Y), price of snack carried by passenger(Ps).amount of passengers available (Ap)} In other words, Qs:P+Y+Ps+Ap. 12!. The estimated linear demand function comes out to be- Q5=5.7263+0.03207|nY-2.261|nP+0.0312lnAp-0.057InP5. Note:- The denade function is estimated after taking log values of all the variables. This is so because each column varied in units and taking log has helped in making the data in a symmetrical units. And all the calculations are done iver EViews SV. {3}. The percentage variation shown by the demand function is high with 2.25 change in units. This implies that 1%increase in prices will lead to decline in demand to 2.26% of the package. (4). The increase in box price by 2 will ultimately decline it's demand by approximately 2%

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