a)Distinguish between different classification of market structures and their prevalence in Tanzania.(20 Marks)

b)In 2019, thesales andadvertising expenditureof seven companies weregiven asfollows ;

Firm	Advertising($ Billions)	Sales($ Billions)
Fiat	5.7	0.27
Honda	6.7	0.12
BP	0.2	0.01
Toyota	0.6	0.04
Apple	3.8	0.05
IBM	12.5	0.46
Phillips	0.5	0.02

The model can be estimated by the following regression equation;

Y_i= +_i+_i..............................................................................Eqn.1

Where;

Y = Companies Sales

X = Advertising Expenditure

_i=Error term

and are parametersto be estimatedin the model

Use the above information to answer the following questions;

(a)What does the error term in the model 1 abovemean?(05Marks)(b)Calculate the sample regression line, whereSalesis the dependent variable (Y) andAdvertisingisthe independent variable (X)(02Marks)(c)Interpret the Slope coefficient(01Marks)(d)Estimate the 2008 average profit of a firm with 2008 sales of $2 billion(02Marks)

NB:

You can use;

and

Or any other formula of your interest.

Answer rating: 100% (QA)

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