Cost Function Homework

Qdem -1263005-43312Price 104.5Income 1.142 Advertising 2. Calculate the price elasticity of demand for this manufacturer if the price is 9.25 per unit, consumer income is 21,000, advertising is 100,000, and the quantity demanded is 499,999. Is demand elastic or inelastic at this price and quantity At these levels elasticity -43312( 9.25/499999) -.80127 Since this value is less than 1 , demand is inelastic. 3. Calculate income elasticity of demand for this manufacturer at the same point as identified in question 2. Is the product an inferior good, a normal good, or a luxury Income elasticity 104.5( 21000/499999) 4.389 As value is more than 1 this good is a luxury. Complete the following questions on production function 1. Write the production function resulting from your regression output. Include specific coefficients. CoefficientsStandard Errort StatP-valueIntercept25193.9585258.730.29550.774316Labor4.4068270.7970125.5291830.000366Invest62259.9423068.952.6988630.024439 Assuming a linear production function We have Qprod 25193.95 4.4068L 62259.94Capital 2. Assume a firm has five plants and 60,000 hours of labor. Estimate the firms Put Capital 5 and L 60000 to get Qprod 362934.6 a. Marginal product (add one hour of labor and measure the change in output) MP of labor coefficient of labor 4.406827 b. Average product of labor AP Qprod/ L 362934.6/600006.04891 3. Now