1. What are the relevant factors to be considered for modeling a demand function for Maa mustard oil??
2. What model and functional form is appropriate to show the impact of each factor you have identified using OLS regression techniques and why? Write your demand model ( equation).
3. Run the regression and submit output statistics for approval.
4. Use the estimated demand function to forecast the demand for Maa mustard oil.
5. How would a 1% increase in the independent variables impact the demand for Maa oil? i.e. interpret the coefficient estimates.
6. Analyze the model significance using the regression statistics: R-square, t-statistics.
7. Use the regression standard error to determine the range within which demand for the product will fall with a 95% confidence interval.
8. Calculate and interpret the following elasticities: Own price, cross price, income, and advertising and explain what these results suggest about the effects of changes in each of these variables on the demand for Maa mustard oil?
9. What will be the impact of a price change by the company on the total revenue of Maa mustard oil. (assuming other variables remain constant)?
10. What is the revenue maximizing price for Maa oil if the competitor's price does not increase in October 2015?