2. Suppose the Clean Springs Water Company is a market leader in a OLIGOPOLY market of...
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2. Suppose the Clean Springs Water Company is a market leader in a OLIGOPOLY market of bottled water in California. Using a diagram show how the company as a market leader would have price and quantity determined provided the rest of the companies would follow. Note: Graph without the detail components including axis, curves in the graph, and price and quantity determination process will amount to partial answer and less than 40% of the total points. Estimate a demand equation for pork demand using the attached quarterly data: a) Convert the nominal values of prices and income into real prices and income using the given CPI (2 points) b) Create dummy variables to account for seasonality in pork demand (3 points) c) Estimate demand equation for pork using real prices, real income and the dummy variables as explanatory variables (2 points) d) Explain your results using: A) R-squared value (1 point) B) global and individual hypothesis tests for each of the key explanatory variables using the null and alternative hypothesis (5 points) c) Calculate own-price, cross price and income elasticities (3 points) 2. Suppose the Clean Springs Water Company is a market leader in a OLIGOPOLY market of bottled water in California. Using a diagram show how the company as a market leader would have price and quantity determined provided the rest of the companies would follow. Note: Graph without the detail components including axis, curves in the graph, and price and quantity determination process will amount to partial answer and less than 40% of the total points. Estimate a demand equation for pork demand using the attached quarterly data: a) Convert the nominal values of prices and income into real prices and income using the given CPI (2 points) b) Create dummy variables to account for seasonality in pork demand (3 points) c) Estimate demand equation for pork using real prices, real income and the dummy variables as explanatory variables (2 points) d) Explain your results using: A) R-squared value (1 point) B) global and individual hypothesis tests for each of the key explanatory variables using the null and alternative hypothesis (5 points) c) Calculate own-price, cross price and income elasticities (3 points)
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Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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