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# Economics - Demand Problems/Calculations

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Economics - Demand Problems/Calculations. See attached file for full problem description.

1. Assume you have to analyze the following data provided to you from the Accounting Department.
a) From Column A and E in the demand schedule above, what is the price elasticity of demand when our price is between \$1600 and \$1450 per unit, average income equals \$40,000, and another company charges a price that is \$100 higher than ours'? Tells me what this coefficient means.
b) From Column A and D in the demand schedule above, what is cross-price elasticity of demand when our price is \$1500 per unit and average income equals \$40,000'? Tells me what this coefﬁcient means.
c) From Column A and B in the demand schedule above, what is income elasticity of demand when our price is \$1500 per unit and the price of another company is \$100 more than ours? Interpret the coefficient.
d) From Column A and F what is the average cost per unit when our price is \$1500 per unit and average income equals \$40,000? In addition, what are total ﬁxed and variable costs at this price'?
e) Take the data that you used in (a) above and estimate a demand equation. Interpret the results of the regression with as much detail as you can. (Attach any computer output as you deem necessary).