Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 3 AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors

image text in transcribed

Question 3 AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors of your product are Asaase Wura fertilizer from YARA Ghana Ltd. As an expert in the marketing of fertilizers, you have been poached from YARA Ghana Ltd to oversee the marketing of this new product. For you to make informed decision and advise the board appropriately, you engaged an economist who estimated the demand equation for your firm's product. The economist used data from 549 cocoa farmers around the country for the month of January 2021 to estimate a linear regression for your product: Now suppose 2 bags of BedRock Fertlizer is sold for GH 40 , a bag of Asaase Wura Fertilizer is sold for GH40, the per capita income of cocoa farmers is GH750, the company spends GH 800 on advertising. a. Write down the estimated demand equation for your firm's product. b. Test for the significance of the estimated coefficients of the explanatory variables at 5% significance level using t=2. c. Interpret the coefficient of the significant variables. d. Determine the quantity of BedRock Fertlizers bought by consumers. e. Estimate the own price elasticity of demand and state the type of demand Curve. f. What would be the firm's price policy option? g. Assess the probable impact on your firm if YARA Ghana decreases the price of Asaase Wura Fertilizer by 8%. h. Interpret the adjusted R-squared

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_2

Step: 3

blur-text-image_3

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

Management Accounting For Decision Makers

Authors: Dr Peter Atrill, Eddie McLaney

6th Edition

0273731521, 9780273731528

More Books

Students also viewed these Accounting questions