This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What are the key steps for analyzing Demand functions based on Regression results? What will be ... (Read 12 times)

RYAN BANYAN

  • Hero Member
  • *****
  • Posts: 563
on: Jul 1, 2018
What are the key steps for analyzing Demand functions based on Regression results?
 
  What will be an ideal response?

Question 2

Firms that make game systems like Playstation and Nintendo typically charge a price close to average cost on the game system itself, and do not change that price even when the systems are scarce or demand increases.
 
  Why might this be a profit-maximizing strategy?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

amcvicar

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jul 1, 2018
Answer to Question 1

Check signs and magnitudes; compute elasticity coefficients; determine statistical significance.

Answer to Question 2

These firms are selling two products, the systems and the games. These are complementary products. If they increase the price of the systems, they reduce the demand for games (and games are repeat purchases rather than one-time purchases). Additionally, the system is the hook, or the loss leader that draws customers in. Once you have the system, the switching cost of moving to another system is significant. Thus the systems are cheap, and the games are expensive.


RYAN BANYAN

  • Member
  • Posts: 563
Reply 2 on: Jul 1, 2018
:D TYSM

nanny

  • Member
  • Posts: 313
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Thyroid conditions cause a higher risk of fibromyalgia and chronic fatigue syndrome.

Did you know?

All patients with hyperparathyroidism will develop osteoporosis. The parathyroid glands maintain blood calcium within the normal range. All patients with this disease will continue to lose calcium from their bones every day, and there is no way to prevent the development of osteoporosis as a result.

Did you know?

The most common childhood diseases include croup, chickenpox, ear infections, flu, pneumonia, ringworm, respiratory syncytial virus, scabies, head lice, and asthma.

Brain Anatomy and Functions Brain Anatomy and Functions
Continuum of aggression. Based on an unpublished figure by Joanne DeSanto Iennaco. Continuum of aggression. Based on an unpublished figure by Joanne DeSanto Iennaco.
Structures and Functions of the Eye Structures and Functions of the Eye
Endocrine System: Facts, Functions and Diseases Endocrine System: Facts, Functions and Diseases
Functions and Properties of Blood Functions and Properties of Blood
Finding derivatives of Trig Functions - pt 7 Finding derivatives of Trig Functions - pt 7
Video: hGH (protein synthesis, growth and development)

For a complete list of videos, visit our video library