Question 1 Suppose you have the following estimated linear demand equation for beet. Q = 1.06 - 2P + 0.37Pp+3P-+0.71 Where, Q= consumption of beef (000 pounds) P= real retail price of beef per pound ($) Pp= real retail price of pork per pound (5) Pc = real retail price of Chicken per pound ($) I= real disposable income per capita ($) The values of the variables are given as, Q=50 P=$4, Pp=53, Pc=$4, and I = $100 Calculate the price elasticity of demand for beef. Based on the price elasticity of demand, should the beef seller provides discount to increase revenue or not? Explain your answer. Question 2 Refer to the estimated demand equation, Q = 1.06 - 2P + 0.37Pp+3P.+0.71. Calculate the cross price elasticity of demand between beef and chicken. Are beef and chicken substitutes in consumption or complements? Explain you answer. Where. Q- consumption of beef (000 pounds) P. real retail price of beef per pound ($) Pp= real retail price of pork per pound ($) Pc = real retail price of Chicken per pound ($) I= real disposable income per capita ($) The values of the variables are given as, Q-50 P-$4. Pp-$3. Pc $4. and 1 = $100Question 3 Refer to demand equation, Q = 1.06 - 2P + 0.37Pp+3P2+0.71. Calculate income elasticity of demand for beef. Based on the income elasticity, is beef normal or inferior good? If normal, is beef necessity or luxury? Where, Q= consumption of beef (000 pounds) P= real retail price of beef per pound (5) Pp= real retail price of pork per pound ($) Pc = real retail price of Chicken per pound (5) = real disposable income per capita ($) The values of the variables are given as, Q=50 P=$4, Pp=$3. Pc=$4, and 1 = $100 Question 4 5 pts The Kingston Company hires a consultant to estimate the demand function for its product. Using the regression analysis, the consultant estimates the following log-linear demand function. How much is the price elasticity of demand for Kingston's product? If Kingston wants to increase revenue, based on the price elasticity, shall it out or raise price? Explain. log Q = 2.01 - 0.5 log P + 0.26 log Z +1.7 log Y Where Q=quantity demanded (in tons) of Kingston's product P=price (in dollars per ton) of Kingston s product Z=price (in dollars per ton) of a related product Question 5 5 pts The Kingston Company hires a consultant to estimate the demand function for its product. Using the regression analysis, the consultant estimates the following log-linear demand function. How much is the income elasticity of demand for Kingston's product? Is Kington's product normal necessity, normal luxury, or inferior? log Q = 2.01 - 0.5 log P + 0.26 log Z +1.7 log Y Where Q=quantity demanded (in tons) of Kingston's product P=price (in dollars per ton) of Kingston s product Z=price (in dollars per ton) of a related product Y=income of the customer of Kingston.Question 6 5 pts Refer to the demand function for Kingston Company. Based on the estimate of income elasticity, is Kingston's product normal or inferior goods? Explain your answer. Which types of locations, Kingston should offer it's product for sale? In lower-, lower-middle income or high income locations? Explain. Question 7 5 pts Please review Demand analysis 1_derive demand equation SUM24 slides and Chapter 7 from Maurice. p. 12-16. Chapter 7 from Maurice is available in Module 2 readings. Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States. Wilpen estimates the U.S. demand for its tennis balls by using the following linear specification: Q -a +bP +cMed where Q is the number of cans of tennis balls sold quarterly, P is the wholesale price (in$) Wilpen charges for a can of tennis balls, M (in$) is the consumers' average household income, and PR (in$) is the average price of tennis rackets. Also, in the equation, a is the intercept of the demand equation. The b, c, and d are the coefficients of P, M, and PR, respectively. After applying data to the demand equation using the ordinary least square (OLS) method, Wilpen Company analysts obtain the results in the table below: Table 1 VARIABLES PARAMETER ESTIMATES INTERCEPT 425120 -37260.6 1,49 -1456 Using the specified demand equation (Q -a +bP +cM+dP,) and estimates from the table, write the estimated demand equation for Wilpen. Question 8 5 pts Wilpen charges a wholesale price of $1.65 (P] per can of tennis ball. The average price of a tennis racket is $110 (P,) and consumers' average household income is $24,600 (M) Refer to the estimated demand equation in previous problem. What is the estimated number of cans of tennis balls demanded (Of? Please review Demand analysis 1_derive demand equation SUM24 slides and Chapter 7 from Maurice, p. 12-16. Chapter 7 from Maurice is available in Module 2 readings. Question 9 5 pts In principles of microeconomics, the price elasticity of demand is calculated as: Price elasticity of demand = (% change in Q)/( change in P) In Module 2, "Demand analysis 2_calculate elasticity from linear demand equation SUM24" slides provides formula to calculate price elasticity of demand from estimated demand equation or the estimates from Table 1 Using the Wilpen charges a wholesale price of $1.65 (P] per can of tennis ball, estimated Q from previous problem, and the estimate of price coefficient from Table 1, calculate the percentage change in Q or percentage change in the number of cans of tennis balls demanded if the price of tennis balls decreases by 15%. Show your calculation steps