1. Consider the market for Papa Johns pizza in Macomb. Regression analysis provides a demand and supply...
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Question:
1. Consider the market for Papa John’s pizza in Macomb. Regression analysis provides a demand and supply equation as follows:
QPJ=1000 – 250PPJ + .15m + 60PPH -90PB
Where:
PPJ = price of Papa John’s Pizza
m=income
PPH = price of Pizza Hut Pizza
PB = price of breadsticks
- Interpret the coefficient for the price of pizza hut pizza assuming it is statistically significant?
- Determine the simplified demand equation for Papa John’s pizza at current market values: m=$25,000; PPH= $12; PB=$5.
- Calculate the x and y-intercepts for demand and plot them on a graph below. Show the factors held constant or underlying assumptions.
- If the price of pizza hut pizza increases to $15, then determine the new simplified equation for sales of papa john’s pizza. Graph this on your graph above.
- In words, explain what is happening in your graph (did the entire demand shift? in which direction? And why?)
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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