Answer to Question #228487 in Macroeconomics for Kibatu

Question

Assume you are managing a firm that recently entered in the transportation service, which
is meter taxi service similar with Ride, Feres and others. If you have to estimate the
demand for the transportation service you provide

Answer 1

The complete question is:

Assume you are managing a firm that recently entered in the transportation service, which

is meter taxi service similar with Ride, Feres and others. If you have to estimate the

demand for the transportation service you provide, (6 marks)

a. What would be the explanatory variables you include in a regression model?

Solution

a.). The explanatory variables that can be included in a regression model are price of the product, price of the substitute and complimentary products and level of income, all of which are independent variables. They are denoted by “X”.