Consumer Demand Analysis and Estimation Applied Problems Problem 1: Patricia is researching ve...

Aug 2nd, 2016
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Problem 1: Patricia is researching venues for a restaurant business. She is evaluating three major attributes that she considers important in her choice: taste, location, and price. The value she places on each attribute, however, differs according to what type of restaurant she is going to start. If she opens a restaurant in a suburban area of Los Angeles, then taste is the most important attribute, three times as important as location, and two times as important as price. If she opens a ......... Problem 2: The demand function for Newton’s Donuts has been estimated as follows: Qx = -14 – 54Px + 45Py + 0.62Ax where Qx represents thousands of donuts; Px is the price per donut; Py is the average price per donut of other brands of donuts; and Ax represents thousands of dollars spent on advertising Newton’s Donuts. The current values of the independent variables are Ax=120, Px=0.95, and Py=0.64. Show all of your calculations and processes. Describe your answer for each question .....

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20Consumer Demand Analysis and Estimation AppliedProblemsPlease complete the following two applied problems:Problem 1:Patricia is researching venues for a restaurant business. She is evaluating three major attributesthat she considers important in her choice: taste, location, and price. The value she places oneach attribute, however, differs according to what type of restaurant she is going to start. If sheopens a restaurant in a suburban area of Los Angeles, then taste is the most important attribute,three times as important as location, and two times as important as price. If she opens arestaurant in the Los Angeles metropolitan area, then location becomes three times as importantas taste and two times as important as price. She is considering two venues, respectively, a steakrestaurant and a pizza restaurant, both of which are priced the same. She has rated each attributeon a scale of 1 to 100 for each of the two different types of restaurants.Steak RestaurantTasteLocationPricePizzaRestaurant805565708050Show all of your calculations and processes. Describe your answer for each question in completesentences.1. Which of the two options should Patricia pursue if she wants to open a restaurant in asuburban area of Los Angeles? Calculate the total expected utility from each restaurantoption and compare. Graph is not required. Describe your answer, and show yourcalculations.2. Which of the two options should she pick if she plans to open a res

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