AFB Company Ltd is a company that was set up in June 2020 that produces a...

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AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors of your product are Asaase Wura fertilizer from YARA Ghana Ltd. As an expert in the marketing of fertilizers, you have been poached from YARA Ghana Ltd to oversee the marketing of this new product. For you to make informed decision and advise the board appropriately, you engaged an economist who estimated the demand equation for your firm's product. The economist used data from 549 cocoa farmers around the country for the month of January 2021 to estimate a linear regression for your product: Variable Intercept Price of BedRock Fertlizer per bag (P₁) Price of Asaase Wura Fert per bag (Py) Per capita Income (1) Advertising (A) R-squared Adjusted R-squared F-statistic Parameter Estimates -144 -2.5 1.25 0.20 0.06 0.9219 0.8947 7.8394 Curve. f. What would be the firm's price policy option? Standard error 24.2347 0.98261 0.0242 0.3685 0.0224 Now suppose 2 bags of BedRock Fertlizer is sold for GH 40, a bag of Asaase Wura Fertilizer is sold for GH 40, the per capita income of cocoa farmers is GH¢750, the company spends GH 800 on advertising. a. Write down the estimated demand equation for your firm's product. b. Test for the significance of the estimated coefficients of the explanatory variables at 5% significance level using t = 2. c. Interpret the coefficient of the significant variables. d. Determine the quantity of BedRock Fertlizers bought by consumers. e. Estimate the own price elasticity of demand and state the type of demand g. Assess the probable impact on your firm if YARA Ghana decreases the price of Asaase Wura Fertilizer by 8%. h. Interpret the adjusted R-squared AFB Company Ltd is a company that was set up in June 2020 that produces a fertilizer known BedRock Fertilizer. Among the competitors of your product are Asaase Wura fertilizer from YARA Ghana Ltd. As an expert in the marketing of fertilizers, you have been poached from YARA Ghana Ltd to oversee the marketing of this new product. For you to make informed decision and advise the board appropriately, you engaged an economist who estimated the demand equation for your firm's product. The economist used data from 549 cocoa farmers around the country for the month of January 2021 to estimate a linear regression for your product: Variable Intercept Price of BedRock Fertlizer per bag (P₁) Price of Asaase Wura Fert per bag (Py) Per capita Income (1) Advertising (A) R-squared Adjusted R-squared F-statistic Parameter Estimates -144 -2.5 1.25 0.20 0.06 0.9219 0.8947 7.8394 Curve. f. What would be the firm's price policy option? Standard error 24.2347 0.98261 0.0242 0.3685 0.0224 Now suppose 2 bags of BedRock Fertlizer is sold for GH 40, a bag of Asaase Wura Fertilizer is sold for GH 40, the per capita income of cocoa farmers is GH¢750, the company spends GH 800 on advertising. a. Write down the estimated demand equation for your firm's product. b. Test for the significance of the estimated coefficients of the explanatory variables at 5% significance level using t = 2. c. Interpret the coefficient of the significant variables. d. Determine the quantity of BedRock Fertlizers bought by consumers. e. Estimate the own price elasticity of demand and state the type of demand g. Assess the probable impact on your firm if YARA Ghana decreases the price of Asaase Wura Fertilizer by 8%. h. Interpret the adjusted R-squared

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a The estimated demand equation for the firms product is Q 144 242347P 098261Py 020I 03685A b The ttest for the coefficients of the explanatory variab... View the full answer