The Demand for Hamburgers Is Estimated from This Theoretical Model

question 41

Essay

The demand for hamburgers is estimated from this theoretical model:
Q = kP^aI^bA^ce,
where Q = units per day,P = price per unit,A = advertising budget per month by sellers,I = per capita income of consumers,and e = random error.In a recent study,one researcher estimated the log-linear form of this equation with regression analysis as:
log Q = 2.5 - 0.33log P + 0.15log I + 0.2log A.
Explain what the coefficients of log P,log I,and log A reveal about this product.

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Definitions:

Margin

The difference between the cost of a product or service and its selling price.

Economics

The efficient allocation of the scarce means of production toward the satisfaction of human wants.

Input

Resources used in the production process, including labor, materials, machinery, and other factors of production.

Demand

The volume of goods or services that individuals are prepared and financially able to acquire at varying price points during a certain time span.