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(answered) – 1) Questions 1 through 5 are based on thefollowing scenario

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(answered) – 1) Questions 1 through 5 are based on thefollowing scenarioDescriptionSolution downloadThe Question1)???????????Questions 1 through 5 are based on thefollowing scenario (adapted from Chapter 5 demand estimation question number 3,p.163)The maker of a leading brandof low-calorie microwavable food estimated the following demand equation forits product using data from 26 supermarkets around the country for the month ofApril:Q =-5,200 ? 42P + 20Px + 5.2l + 0.20A + 0.25M?????? (2.002)?(17.5)? (6.2)?? (2.5)??(0.09)?? (0.21)???????? R2= 0.55? ?????n = 26??????F =4.88Assume the following valuesfor the independent variables:Q =Quantity sold per monthP (incents) = Price of the product = 500Px (incents) = Price of leading competitor?s product = 600I (in dollars) = Per capitaincome of the standard metropolitan statistical area (SMSA) in which thesupermarket is located = 5,500A (indollars) = Monthly advertising expenditure = 10,000M = Number of microwave ovenssold in the SMSA in which the supermarket is located = 5,000Calculate thequantity using the given values for the independent variables.??????????2)???????????Refer to question 1. Calculate the priceelasticity of demand. Hint: Use the point elasticity method described on page72. A numeric example is demonstrated in the second paragraph on that page.?????????????????????? ???3)???????????Based on the price elasticity of demand, doyou think that this firm should cut its price to increase its market share?No, demand is inelastic socutting price would reduce revenue.No, demand is elastic socutting price would reduce revenue.Yes, demand is inelastic socutting price would increase revenue.**Yes, demand is elastic socutting price would increase revenue.???4)???????????Using the information in question 1, computethe income elasticity.????5)???????????Based on the price elasticity of income, doyou think that this company would be extremely concerned about the impact of arecession on its sales?Yes, income elasticity is relatively high, so a recession(with lower income) would likely reduce sales.Yes, income elasticity is relatively low, so a recession(with lower income) would likely reduce sales.No, income elasticity is relatively high, so a recessionwould not have a large impact on sales.No, income elasticity is relatively low, so a recessionwould not have a large impact on sales.?6)???????????What proportion of the variation in sales isexplained by the independent variables in question 1????7)???????????Office Enterprises (OE) produces a line ofmetal office file cabinets. The company?s economist, having investigated alarge number of past data, has established the following equation of demand forthese cabinets:Q =10,000 + 60B ? 100P + 50C where??????????? Q = Annual number of cabinets sold??????????? B= Index of nonresidential construction??????????? P= Average price per cabinet charged by OE??????????? C= Average price per cabinet charged by OE?s closest competitorIt is expected that nextyear?s nonresidential construction index will stand at 160, OE?s average pricewill be $40, and the competitor?s average price will be $35.Forecast annual sales. Enteryour response as a whole number without the dollar sign.??8)???????????What will be the new sales forecast if thecompetitor lowers its price to $32????9)???????????What will be the new sales forecast if OEreacts to the decrease mentioned in the previous question by lowering its priceto $37? (The competitor?s price will now be $32 and the firm?s own price willbe $37.)???10)????????If the index forecast was wrong, and it turnsout to be only 140 next year, what will be OE?s projected sales assuming the originalprice information of P = $40 and C = $35? Enter your answer as whole number