UBT Soft Drinks Managerial Economics Analysis

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Managerial Economics Assignment (weight 20%)
Use the spreadsheet data to estimate the demand for soft drinks. the spreadsheet data includes the
demand for soft drinks in each of the 48 continental states for a particular year. Present your results
in the form of a short report (maximum 1500 words) with the following elements:
1. A brief introduction to report. This should include an indication of the form of the model used,
including the expected signs of the coefficients for each variable (use quality academic resources in
this area, why do you think these factors affect the demand function).
2. An analysis of each variable in the model. This should include:
•
•
•
An interpretation of each estimated coefficient
A discussion of whether sign of the estimated coefficient met your expectation
Testing the validity of each variable using the p-value
3. Calculate the point price elasticity, the point income elasticity, and the point cross-price elasticity for
soft drinks. Given an interpretation of each calculated elasticity. Based on the estimated elasticities,
answer the following questions:
•
•
•
Should soft drink companies increase or decrease the price to increase revenue from soft drinks?
Are soft drinks a normal or inferior good in this situation?
What is the relationship between soft drinks and bottled water?
V. Give a brief conclusion. Summarize why you think the model is good or not. Indicate which variables
are significant and which are not. In a second paragraph, discuss which potential problems might be
relevant in this case. This includes the problems they lead to and potential solutions.
Your assignment must follow these requirements:
•
•
•
•
•
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all
sides; citations and references must follow APA.
Include a cover page containing the title of the assignment, the student’s name, the course title, and
the date. The cover page and the reference page are not included in the required assignment page
length.
Use at least three (4) quality academic resources in this assignment. Note: Wikipedia does not
qualify as an academic resource.
Include your computer regression output. Do not submit it as a separate file; you should copy the
spreadsheet cells and paste them into a word processing document.
Writing mechanics, grammar, and formatting, information Literacy / integration of sources and clarity
and coherence of writing are a way to get a high score.
State
Alabama
Arizona
Arkansas
California
Colorado
Connecticutt
Delaware
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Cans Bought
(Millions)
981
1126
712
5347
715
426
305
5301
3187
163
1437
1252
334
416
1036
1238
156
1325
788
1081
617
745
1260
86
195
532
249
1274
331
2143
3532
51
1932
737
292
293
153
1257
87
1629
6594
331
6-Pack Price
(Cents)
196
193
168
393
242
318
215
224
169
221
222
197
199
193
186
185
257
273
301
200
235
170
169
247
207
238
249
289
190
338
179
230
201
191
302
235
266
185
234
194
190
233
Per Capita Income
($ Thousands)
$49.90
$59.20
$47.10
$75.30
$72.00
$76.30
$64.80
$55.50
$58.80
$55.60
$65.00
$55.70
$60.00
$58.20
$50.20
$47.90
$55.60
$83.20
$79.80
$56.70
$70.30
$44.70
$54.50
$55.30
$59.60
$58.60
$75.00
$81.70
$47.20
$67.80
$53.90
$63.80
$56.10
$51.90
$63.40
$60.90
$64.30
$52.30
$56.30
$52.40
$60.60
$71.40
Price of Water
(Cents Per Bottle)
30
30
28
43
28
32
28
35
29
21
25
24
23
25
26
33
24
35
31
21
21
28
25
24
22
26
19
34
25
34
28
20
23
36
34
26
30
31
23
27
32
25
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
39
2323
602
260
573
62
270
205
242
192
232
206
$60.80
$72.60
$74.10
$44.10
$60.80
$61.60
25
29
27
25
23
21
Population
(Millions)
4.9
7.5
3
39.6
5.9
3.6
1.4
21.9
10.8
1.9
12.6
6.8
3.2
2.9
4.5
4.6
1.4
6.1
6.9
10
5.7
3
6.2
1.1
2
3.2
1.4
8.9
2.1
19.3
10.7
0.8
11.7
4
4.3
12.8
1.1
5.3
0.9
6.9
29.7
3.3
Cost of Living
Index
89.3
97
86.9
151.7
105.6
127.7
108.1
97.9
89.2
92.3
94.5
90
90.1
89
90.9
93.9
117.5
129.7
131.6
88.9
101.6
86.1
87.1
106.9
90.8
108.5
109.7
125.1
87.5
139.1
94.9
98.8
90.8
87
134.2
101.7
119.4
95.9
99.8
88.7
91.5
98.4
0.6
8.6
7.8
1.8
5.9
0.6
114.5
100.7
110.7
91.1
97.3
89.3
Cans Bought
6-Pack Price
Per Capita Income
Price of Water
Population
Cost of Living
Cans bought in each state, in millions
Price of a six-pack of soft drinks, in cents to make interpretation easier
Per capita nominal income, in thousands of dollars
Price of a bottle of water, in cents
Population of each state, in millions
Cost of living index for each state, can be used as a proxy for the Consumer Price Index (Source: Wo
Index (Source: World Population Review)

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Explanation & Answer:
1500 Words

Tags:
managerial economics

soft drinks

estimated coefficient

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