Question

The results of the demand forecast of Pizza is presented to you for analysis. As a new manager of the company, you are required to provide an explanation for this forecast given your knowledge of managerial economics so that the company would know what to concentrate on.

          Y= 1.1 - 2.0P + 0.5S + 0.8X + 1.5T

                        (3.2)    (9.3)    (1.2)     (2.6)

R² is 0.78;      Probability value (F-statistic) is 0.02; t-statistics are the values in the bracket above

Whereby

Y is the Quantity demand for pizza

P is the price of Pizza (in dollar)

S is the demand for Soft drink (in number of quantity)

X is the income of people in the market surveyed (in 1,000 dollar).

T is the taste of the consumers for Pizza in that area

Answer 1