Answer to Question #221906 in Macroeconomics for vidu

Question

Qd = β0 +β1Psh +β2M+β3Pcg+β4Ax+ β5C

Where,

Qd = Quantity demand for a deluxe room in sh

Psh = Price of a deluxe room in sh (US$/room) = US$. 200.00

M = Visitors per capita income (US$/Day) = US$ 120

Pcg = Price of a deluxe room in CG (US$/room) = US$. 150.00

Ax = Average advertising expenditure in sh (US$/room) US$. 18.00

C = Customer Satisfaction Index = 8.56

DV: Q R- Square: 0.86 T table value 1.671

No of obse: 62 F- Ratio: 154.15

Var Para Esti SE

β0 127.8 49.6

β1 -1.3.0 0.42

β2 2.75 1.01

β3 2.55 1.21

β4 1.41 0.48

β5 1.85 0.23

a) Are estimated parameters comparable with economic theory? Explain

b) Construct the Total Revenue (TR) function of Sh hotel and determine the TR maximize demand

b) What are the significant parameters that could be impact on the demand for a deluxe room

c) Calculate and interpret, cross-price elasticity, income elasticity, and advertising elasticity of demand for a deluxe room

d) Calculate Adjusted R2 and interpret it.

Answer 1

a) Parameters refers to the things with which the output or behavior of something is compared.

Step 2

a) There are various significant parameters that could impact the demand for deluxe room are as follows:-

1) Price of a deluxe room in sh

2) Visitors per capita income

3) Price of a deluxe room in CG

4) Average advertising expenditure in sh

5) Customer satisfaction index

Answer: Therefore, these are the various parameters that could impact the demand for deluxe room.