Subject: Business, Economics; 1.Ethio-telecom estimated the demand and supply for mobile data packages in MB per day as Qd=50-2P and P=Qs/2+5. With the introduction of new telecom service providers, the price is expected to be 5 cents per MB. (5%)

a.Estimate the equilibrium price and quantity

b.What would happen to the market at the new prices of 5 cents?

c.Compare the price, the demand, and the supply before and after the introduction of the new service provider

2.ABC chemical factory produces different detergent, cosmetic and similar products. After cases of Covid-19 pandemic are reported in the country, the demand for disinfectant chemicals and hand sanitizer has boomed and some companies have been producing it before COVID-19. Due to the increase in demand, ABC started producing the sanitizer and distributes throughout major cities in the country. The following table shows weekly demand data and identified determinant variables in 30 major cities. The second table also shows the weekly total sales of 1-liter hand sanitizer for the past 3 months.

Sanitizer Demand (1 Litre) for ABC Company

Major cities

Weekly Demand

Price in Birr

Competitors price in Birr

advert cost

Household income

(annual)

1

1290

137

94

814

53123

2

1177

147

81

896

51749

3

1155

149

89

852

49881

4

1299

117

92

854

43589

5

1166

135

86

810

42799

6

1186

143

79

768

55565

7

1293

113

91

978

37959

8

1322

111

82

821

47196

9

1338

109

81

843

50163

10

1160

129

82

849

39080

11

1293

124

91

797

43263

12

1413

117

76

988

51291

13

1299

106

90

914

38343

14

1238

135

88

913

39473

15

1467

117

99

867

51501

16

1089

147

76

785

37809

17

1203

124

83

817

41471

18

1474

103

98

846

46663

19

1235

140

78

768

55839

20

1367

115

83

856

47438

21

1310

119

76

771

54348

22

1331

138

100

947

45066

23

1293

122

90

831

44166

24

1437

105

86

905

55380

25

1165

145

96

996

38656

26

1328

138

97

929

46084

27

1515

116

97

1000

52249

28

1223

148

84

951

50855

29

1293

134

88

848

54546

30

1215

127

87

891

38085

A.Estimate the demand using regression based on the data provided

B.Show the interpretation of the results, the coefficients, significance of the result and explanatory power of the regression model

C.Based on your estimate results forecast weekly demand for the following new markets (cities) with the characteristics given.

Forecast the demand for New markets (cities)

New Cities

Priceof

sanitizerin

birr

Competitorsprice in birr

Advert cost

Household income

AA

115

90

790

41234

AB

122

101

812

39845

AC

116

87

905

47543

AD

140

82

778

53560

AE

133

79

996

39870

D.

E.Based on the given sales volume of ABC's sanitizer product for 16 weeks, construct the trend projection using graphs, 3 weeks moving average, and exponential smoothing methods.

Weeks

Sanitizer

sales

1

5600

2

5200

3

4570

4

4305

5

5465

6

8900

7

15680

8

24680

9

35040

10

36500

11

38575

12

35300

13

35200

14

35150

15

34950

16

34500