Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please assist You are the owner of Bushveld Pizzas (Pty) Ltd in the new mall at Hazy View in Mpumalanga After your first year, you

please assist

image text in transcribed
You are the owner of Bushveld Pizzas (Pty) Ltd in the new mall at Hazy View in Mpumalanga After your first year, you decided to do some research to determine what your expected weekly sales (quantity demanded) will be in order to plan your cash flow Your research consists of three components: 4: From your till slips you gathered and captured the following data Every time you increased or reduced the average price of your pizzas by 10%, your sales decreased or increased by 30% Irrespective of an increase or decrease in the price of your pizzas, sales on Fridays were 500 units more compared to every other day of the week. Every time that your only competitor in the mall, Greasy Hamburgers (Pty) Ltd, increased (reduced) the price of its double hamburgers by 10%, your sales increased (decreased) by 20% B. Every week you spend R1 000 on advertisements by placing flyers under the windscreen wipers of the parked vehicles in the parking area of the mall You realised that your sales dropped by 10% during the weeks that you did not do this, but increased by 10% if you did this again the following week. C. From the answers to a questionnaire that you asked customers to fill in at the shop you established that they increased their spending on pizzas by 0.05% per week for each 1% increase in their disposable income From their answers you also gathered that the average weekly income of your customers is R61000 per household. You asked one of your part-time waitresses, who is a student in economics, to do a regression analysis of the data you gathered. She found the following: R2 = 0.65, n = 252, the standard deviation (SEC) for your price (P) = 15, that of income (Y) = 0.02 and that of advertising (A) = 0.06. The t-value for the price of the competitor (Pc) = 4. The current average price for a pizza is R90 00 and for a double Hamburger it is R80.00. Required: 2.1. Determine the equation for expected pizza sales (Q). (3) 2.2. Calculate the expected weekly sales. 2.3. (2) Calculate the elasticities for the independent variables. (9) 2.4. What is the meaning of the elasticity values for P, Pc and Y? (3) 2.5. What is the meaning of R? = 0.65 and n = 252? (2 ) 2.6 Calculate the t-values for the price of a pizza (P), income (Y) and advertising (A) and explain their meaning (6) 2.7 Calculate the standard deviation (SEC) for the price of a hamburger (Pc) (2)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Econometrics With Economic Applications

Authors: Dennis Halcoussis

1st Edition

0030348064, 9780030348068

More Books

Students also viewed these Economics questions