# Question: Given the OLS estimates for the coefficients and intercept in

Given the OLS estimates for the coefficients and intercept in the basic tier cable demand equation (3), calculate the following:

a. Income elasticity of demand for basic service evaluated at the average values for monthly per capita income and the number of basic subscribers across the sample of ten systems. Based on your calculation, is basic cable a normal or an inferior good?

b. Cross-price elasticity of demand for basic service with respect to the pay tier price evaluated at the average values for the pay tier price and the number of basic subscribers across the ten systems in the sample. Based on your calculation, is pay tier service a substitute or a complement for basic service?

c. The income elasticity of demand for basic service evaluated at the income and quantity data for system number 3.

a. Income elasticity of demand for basic service evaluated at the average values for monthly per capita income and the number of basic subscribers across the sample of ten systems. Based on your calculation, is basic cable a normal or an inferior good?

b. Cross-price elasticity of demand for basic service with respect to the pay tier price evaluated at the average values for the pay tier price and the number of basic subscribers across the ten systems in the sample. Based on your calculation, is pay tier service a substitute or a complement for basic service?

c. The income elasticity of demand for basic service evaluated at the income and quantity data for system number 3.

**View Solution:**## Answer to relevant Questions

Suppose that there are only five consumers of a software game program. The demand curve for each of the consumers is identical. Will the market demand curve that is obtained by horizontally summing across the five individual ...Explain how a bandwagon effect might speed up the rate at which DVD players are adopted by consumers. Do likewise for the case of cable television subscriptions.During the 1970s, 55 percent of banks with more than 15 branches installed automated teller machines (ATMs), as opposed to 16 percent of banks with only 2 branches. Explain why this phenomenon attests to the presence of ...We assumed in the text that families receive the public school subsidy at no direct cost. Yet families pay property (and other) taxes that are used to finance schools. Does this fact invalidate the analysis in the text? Bill and Hillary confront the same market prices for health care and hamburgers. Bill’s optimal consumption point is a corner equilibrium where he consumes only hamburgers; Hillary’s optimal point involves consumption of ...Post your question