Download 332excel assignment e+

Dr. Westerhold
Econ 332
Excel Homework #1: Supply and Demand and Regression Analysis
Part I: Demand and Supply Basics
A. Prepare an excel worksheet with a column for price ranging from $0 to $50 in $5 increments.
Using the following demand and supply relationships to compute the data (creating columns)
for the quantity demanded and quantity supplied at each price point:
Qd= 110 -2P
Qs= -10 +2P
B. Using the excel spreadsheet determine the equilibrium price and equilibrium quantity.
Highlight this row of data on your worksheet.
C. Algebraically, solve for the equilibrium price and quantity to verify your answers. Show your
work.
D. Graphing demand and supply: In order to prepare the data for a graph you will need to
determine the inverse demand (P=f(Qd) and inverse supply equations (P=f(Qs)). After
algebraically determining your new equations create three new columns in your excel
spreadsheet for Q, P=f(Qd) and P=f(Qs). Create data for quantities 0 to 130 in increments of
10.
E. Create a graph in excel with price on the vertical axis and quantity demanded and quantity
supplied on the horizontal axis. You should be able to visually see the equilibrium price and
quantity.
F. Printout a copy of your data, the worksheet viewed with formulas (hit Ctrl and ` which is
located in the upper left-hand corner of most keyboards to show your formulas), the supply
and demand graph, and provide your work from part C.
Part II: Regression Analysis
Prepare a new worksheet to estimate the demand for Ben & Jerry’s ice cream. The demand for Ben &
Jerry’s ice cream depends on its price (P), the price of competing brands (Pc), the temperature (T),
income (I), and advertising expenditures (A).
Suppose you have the following sales data:
Quantity
Price (P)
Price of
Competition (Pc)
Temperature (T)
6870
7750
7000
7520
6230
6690
7020
6950
6750
6540
6380
90
95
92
93
80
88
92
90
88
85
80
4.25
4.00
4.25
4.50
4.75
4.25
4.50
4.75
4.50
4.25
4.00
3.75
3.75
3.25
3.75
3.00
3.25
3.75
3.50
3.75
3.00
3.00
Income (I)
22000
25000
25000
25000
20000
22000
25000
25000
22000
20000
20000
Advertising
Expenditures
(A)
40000
60000
50000
60000
30000
40000
60000
40000
40000
30000
30000
A. Copy this table of data into an excel spreadsheet. Run a regression using quantity as the
dependent variable.
B. (We haven’t covered everything on statistics yet….so don’t worry about any of the output
other than the variable coefficients . Also, don’t worry about the statistical significance of
these coefficients). Write out your demand equation using the estimated coefficients.
C. According to your output, if Ben & Jerry’s lowered its price by $0.50 what would be the impact
on sales?
D. According to your output, if Ben & Jerry’s increased its advertising budget by $10,000 what
would be the impact on sales?
E. Printout a copy of your spreadsheet along with a copy of your regression analysis and provide
your work form parts B-D.