Answer to Question #227423 in Microeconomics for rocy

Question

the linear demand function is given below. Qd = β0 +β1Psh +β2M+β3Pcg+β4Ax+ β5C Where, Qd = deluxe room in S hotel Psh = Price of a deluxe room in S hotel (US$/room) = US$. 200.00 M = Visitors per capita income (US$/Day) = US$ 120 Pcg = Price of a deluxe room in C (US$/room) = US$. 150.00 Ax = in S hotel (US$/room) US$. 18.00 C = Customer Satisfaction Index = 8.56 The estimated computer output of the A above model under Least Square Method (LSM) is as follows, Dependent Variable: Q R- Square: 0.86 T table value 1.671 No of observations: 62 F- Ratio: 154.15 Variables Parameter Estimate Standard Error 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 TR function and determine the TR maximize demand b) What are the significant parameters that could be impact on the demand for a deluxe room in S hotel?

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.