Project of Demand Estimation Essay Example for Free

Project of necessary Estimation EssayInstruction You should prepare the case with your group members. Each group is required to stack away a word file detailing your analysis. You will be graded on your groups performance and your contribution to your group.Summary of the caseYou work for Price Waterman Coopers as a food market analyst. PWC has been hired by the owner of 2 Burger King restaurants located in a suburban capital of Georgia market area to study the demand for its basic hamburger meal packagereferred to as cabal 1 on its menus. The two restaurants face competition in the Atlanta suburb from five some other hamburger restaurants (three MacDonalds and two Wendys restaurants) and three other restaurants serving drive-through fast food (a taco Bell, a Kentucky Fried Chicken, and a small family-owned Chinese restaurant).The owner of the two Burger King restaurants provides PWC with the info shown in Table 1 (Table 1 is in a separate excel file). Q is the total nu mber of crew 1 meals sold at both locations during each week in 1998. P is the average expense charged for a Combination 1 meal at the two locations. Prices are identical at the two Burger King locations. Every week the Burger King owner advertises special terms offers at its two restaurants exclusively in daily composition advertisements. A is the dollar amount spent on newspaper ads for each week in 1998. The owner could not provide PWC with data on prices charged by other competing restaurants during 1998. For the one-year time period of the study, household income and population in the suburb did not diverseness enough to warrant inclusion in the demand analysis.a) Using the data in Table 1, ascertain a linear billetal form for the demand for Combination 1 meals, and run a reverting to estimate the demand for Combo 1 meals.b) Using statistical software, estimate the parameters of the empirical demand function specified in part a. Write your estimated demand equation for C ombination 1 meals.c) Evaluate your atavism results by examining signs of parameters, p-values (or t-ratios), and the adjusted R2.d) Discuss how the estimation of demand might be improved.e) Using your estimated demand equation, fancy an own-price elasticity and an advertising elasticity. Compute the elasticity values at the sample mean values of the data in Table 1. Discuss, in quantitative terms, the meaning of each elasticity.f) If the owner plans to charge a price of $4.15 for a Combination 1 meal and spend $18,000 per week on advertising, how many Combinations 1 meals do you predict will be sold each week?h) If the owner spends $18,000 per week on advertising, write the equation for the inverse demand function. Then, calculate the demand price for 50,000 Combination 1 meals.