Use the dataset pizza for this problem. You have been hired as an economic consultant for a Midwest-based pizza chain called Papa Jim's. Papa Jim's currently operates stores in 111 locations. The marketing department has collected data on each of the locations, including the quantity of pizzas demanded, price charged, average family income in the area, and the number of advertisements run. a. Use the data given to estimate a demand function for Papa Jim's pizza as a function of price, income, advertising, and competitor's price. Report your estimated demand function. b. Suppose the company is planning to open a new store in a location with an average income of $45,000 which is already part of a media market where three advertisements are running. The competitor in the area is currently charging $10.00. Determine the demand function specific to this new location by incorporating this new information into your estimated function. Your answer will be an equation with the price as a variable. c. Suppose Papa Jim's opens the new store from part b, and charges a price of $12.00. Determine the number of pizzas sold and the total revenue at the new C * IT 0 d2lsdor.edu/d2l/te/content/1607403/viewContent/9708228/View UVEYTTJIVUVRE ELLER three advertisements are running. The competitor in the area is currently charging $10.00. Determine the demand function specific to this new location by incorporating this new information into your estimated function. Your answer will be an equation with the price as a variable. c. Suppose Papa Jim's opens the new store from part b, and charges a price of $12.00. Determine the number of pizzas sold and the total revenue at the new store. d. Draw a graph showing the demand function from part b. Label the axes and intercepts. Mark the point given in parte, and draw a box on the graph showing the total revenue. Hint: Total revenue is price times quantity. e. Calculate the own-price elasticity of demand at the new store. Is demand elastic or inelastic? D E G H 1 pizza A B 2 3. Regression Statistics 4 Multiple F 0.907687 SR Square 0.823895 6 Adjusted 0.817187 7 Standard 1039.846 8 Observati 110 9 10 ANOVA 11 df SS 12 Regressio 4 531164253.8 13 Residual 105 113534396.1 14 Total 109 644698649.9 15 16 Coefficient:Standard Error 17 Intercept -555.777 1143.24761 18 6.63 -348.537 69.49395102 19 58646 0.099697 0.011584067 20 0 1216.871 59.07396257 21 9.92 87.6773 69.38999565 MS F 132791063.4 122.8091 1081279.963 Significance F 1.11923E-38 3 Stat P-value -0.486139161 0.627882 -5.015357523 2.16E-06 8.606425861 8.04E-14 20.59910901 1.13E-38 1.26354381 0.209192 Lower 95% Upper 95%ower 95.0 pper 95.0% - 2822.626256 1711.071-2822.63 1711.071 -486.3306776 -210.743 486.331 -210.743 0.076728352 0.122666 0.076728 0.122666 1099.738239 1334.004 1099.738 1334.004 -49.91024374 225.2648 -49.9102 225.2648 Use the dataset pizza for this problem. You have been hired as an economic consultant for a Midwest-based pizza chain called Papa Jim's. Papa Jim's currently operates stores in 111 locations. The marketing department has collected data on each of the locations, including the quantity of pizzas demanded, price charged, average family income in the area, and the number of advertisements run. a. Use the data given to estimate a demand function for Papa Jim's pizza as a function of price, income, advertising, and competitor's price. Report your estimated demand function. b. Suppose the company is planning to open a new store in a location with an average income of $45,000 which is already part of a media market where three advertisements are running. The competitor in the area is currently charging $10.00. Determine the demand function specific to this new location by incorporating this new information into your estimated function. Your answer will be an equation with the price as a variable. c. Suppose Papa Jim's opens the new store from part b, and charges a price of $12.00. Determine the number of pizzas sold and the total revenue at the new C * IT 0 d2lsdor.edu/d2l/te/content/1607403/viewContent/9708228/View UVEYTTJIVUVRE ELLER three advertisements are running. The competitor in the area is currently charging $10.00. Determine the demand function specific to this new location by incorporating this new information into your estimated function. Your answer will be an equation with the price as a variable. c. Suppose Papa Jim's opens the new store from part b, and charges a price of $12.00. Determine the number of pizzas sold and the total revenue at the new store. d. Draw a graph showing the demand function from part b. Label the axes and intercepts. Mark the point given in parte, and draw a box on the graph showing the total revenue. Hint: Total revenue is price times quantity. e. Calculate the own-price elasticity of demand at the new store. Is demand elastic or inelastic? D E G H 1 pizza A B 2 3. Regression Statistics 4 Multiple F 0.907687 SR Square 0.823895 6 Adjusted 0.817187 7 Standard 1039.846 8 Observati 110 9 10 ANOVA 11 df SS 12 Regressio 4 531164253.8 13 Residual 105 113534396.1 14 Total 109 644698649.9 15 16 Coefficient:Standard Error 17 Intercept -555.777 1143.24761 18 6.63 -348.537 69.49395102 19 58646 0.099697 0.011584067 20 0 1216.871 59.07396257 21 9.92 87.6773 69.38999565 MS F 132791063.4 122.8091 1081279.963 Significance F 1.11923E-38 3 Stat P-value -0.486139161 0.627882 -5.015357523 2.16E-06 8.606425861 8.04E-14 20.59910901 1.13E-38 1.26354381 0.209192 Lower 95% Upper 95%ower 95.0 pper 95.0% - 2822.626256 1711.071-2822.63 1711.071 -486.3306776 -210.743 486.331 -210.743 0.076728352 0.122666 0.076728 0.122666 1099.738239 1334.004 1099.738 1334.004 -49.91024374 225.2648 -49.9102 225.2648
