Complete the following questions on demand function: 1. Write 3620

Complete the following questions on demand function: 

1. Write the demand equation resulting from your output. Include specific coefficients. 
2. Calculate the price elasticity of demand for this manufacturer if the price is $9.25 per unit, consumer income is $21,000, advertising is $100,000, and the quantity demanded is $499,999. Is demand elastic or inelastic at this price and quantity? 
3. Calculate income elasticity of demand for this manufacturer at the same point as identified in question 2. Is the product an inferior good, a normal good, or a luxury? 

Complete the following questions on production function: 

1. Write the production function resulting from your regression output. Include specific coefficients. 
2. Assume a firm has five plants and 60,000 hours of labor. Estimate the firm’s: 
a. Marginal product (add one hour of labor and measure the change in output)
b. Average product of labor
3. Now assume the firm has six plants and 60,000 hours of labor. Estimate the firm’s: 
a. Marginal product of labor
b. Average product of labor
4. How do your answers to questions 2 and 3 compare to one another? Is this what you would expect? 


Complete the following questions on cost function: 

1. Write the cost function resulting from your regression results. Include specific coefficients. 
2. Estimate the total, average, and marginal costs for a firm with a quantity sold of 60,000 units. 
3. Is a firm operating at the point identified in question 2 operating at a profit-maximizing level of output? How do you know? If they are not, should they expand or reduce quantity sold to move closer to the profit maximization level? Explain your reasoning. 
4. Estimate the average cost for a firm with a quantity sold of 70,000 units. Compare your answer with the answer to question #2 above. Does the manufacturer appear to have economies of scale? How do you know? 

Data for CLC.docx

Data for CLC #1

Total cost = sum of all costs of doing
business
Q sold = the quantity sold (in units) that
quarter
Q prod = the quantity produced (in units) that quarter
Q dem = the quantity demanded (in units) that quarter
Price = price per unit charged by the firm
Labor = # labor hours used in production in that quarter. For purposes of this assignment, assume that all labor hours are identical.
Capital Investment = the number of plants in operation that quarter. Assume for the sake of this project, that all plants are approximately equal in siz
technology.
Advertising Expenses = dollars spent on advertising that quarter
Advertisin
Consumer
g
C
TC
Qsold
Qprod
Qdem
Price
Labor
Expenses
I Income
Qtr 1
$4,415,000
499,999 499,999
549,425
$9.25
50,000 5
$20,000 $150,000
Qtr 2
$5,186,644
587,236 587,236
714,993
$9.25
60,000 5
$20,600 $150,000
Qtr 3
$5,174,189
548,667 647,480
548,667
$9.75
70,000 5
$21,000 $125,000
Qtr 4
$7,282,201
766,297 667,484
833,521
$9.65
75,000 5
$21,200 $200,000
Qtr 5
$7,630,401
811,784 811,764
860,747
$9.90
85,000 6
$21,400 $200,000
Qtr 6
$6,971,144
697,396 828,822
697,396
$10.25
95,000 6
$22,000 $150,000
Qtr 7
$7,915,228
715,182 829,046
829,046
$11.50
100,000 6
$21,600 $325,000
Qtr 8
$6,901,834
764,199 769,903
769,903
$10.00
75,000 6
$21,600 $150,000