INDIVUDAL ASSIGNMENTS FOR MANAGERIAL ECONOMICS

Individual Assignment1

1. Suppose the Vodafone company recruited you as the country manager of the firm. One of the job descriptions for this position that you were requested is projecting the most likely future demand for Vodafone telecom company. To do so, you requested the Ethiopian Telecom company to provide you past and current demand part for the Ethio telecom but rejected your request. As an alternative option, you decided to use the consumer survey method to forecast the most likely future demand. Briefly discuss

A. How you could forecast future demand for the Vodafone company

B. While forecasting future demand, the personal interview and questionnaire methods are the most frequently used methods. Which method would recommend for the Vodafone firm taking into account the Ethiopian context and why?

C. How do you estimate the most likely future demand for the firm if you use sample survey method?

Individual Assignment2

2. Suppose you estimated the demand function for the above Vodafone firm using a sample taken from residents in Addis Ababa as follows:

=.+.. where , , , and are the level of quantity demanded, price of Vodafone voice call fee, the income of the Vodafone telecom potential customers, and price of Ethiotelecom voice call fee, respectively. Also, assume that all variables are measure in natural logarithm.

A. Identify and interpret the price, income and cross-price elasticity of demand.

B. What will be your recommendation for the general manager of the Vodafone firm considering the price elasticity of demand and why?

C. Are the Vodafone voice services substitute or complements to the ethiotelecom voice services taking into account the above-estimated demand function, not taking into account what you know or what you expect. What is the message or implication of such relationship to the general manager?