Question: Can someone show me how this would be set up in excel? 3. Southern Cotton International is a textile company. It offers two main products.

Can someone show me how this would be set up in excel?

3. Southern Cotton International is a textile company. It offers two main

3. Southern Cotton International is a textile company. It offers two main products. Its marketing department has recently estimated the demand function, facing SCI: Demand for product 1: [Equation] [Equation] is the quantity demanded for product 1 (in natural log), [Equation] is the price of product 1 (in natural log), [Equation] is the price of product 1's substitute (in natural log), [Equation] is the price of product 1's complement (in natural log), and [Equation] is the error term. Parameter [Equation] is estimated to be equal to -0.45 (with standard error being equal to 0.15). Demand for product 2: [Equation] [Equation] is the quantity demanded for product 2 (in natural log), [Equation] is the price of product 2 (in natural log), [Equation] is the price of product 2's substitute (in natural log), [Equation] is the price of product 2's complement (in natural log), and [Equation] is the error term. Parameter [Equation] is estimated to be equal to -0.65 (with standard error being equal to 0.05). a. How much does the demand for product 1 increase if SCI reduces its price by 5%? Describe your answer in percentages. (7.5 points) 2.25% b. How much does the demand for product 2 increase if SCI reduces its price by 5%? Describe your answer in percentages. (7.5 points) 3.25% c. Which one of the above products has a more sensitive demand? Explain your answer in a short paragraph (word limit: 75 words). (7.5 points) Which one is more elastic ? Product 2. It is more elastic and the quantity demanded is sensitive to price. It has a higher price elasticity of demand than product 1. d. Consider the demand for product 1 (or product 2). Which one of the parameters below is expected to be less than zero: as or ac? Explain your answer in a short paragraph (word limit: 75 words). (7.5 points) aC is expected to be less than zero. Since quantity demanded is a function of price, a reduction in price would lead to an increase in quantity demanded.

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