(c) $213.
5-8. (a) —1.08, 1.21, and 1.86, respectively.
(b) P = 94.16947 - 0.95465Q and MR = 94.16947 - 1.9093Q.
(c) $47.08 (perhaps $46.99 would look better).
5-9. (a) The cross-elasticities are 1.666 between Hertz’s compact car and the competitors’ compact
cars, and 1.111 between Hertz’s compact cars and Hertz’s subcompact cars. Thus, the competitors’ compact cars are the stronger substitutes.
(b) P = 34.93528 - 0.2772 Q.
(c) $17.47.
(d) 57.78 to 68.22.
5-10. (a) Own price elasticity is —1.14; cross price elasticities are 4.198 with respect to Sudds and
1.638 with respect to the generic beer; and income elasticity is 1.0038.
(b) P = 14.9987 - 0.345Q.
(c) $7.50.
(d) $8.50.
(e) 17.338 to 20.338.
APPENDIX 5A
5A-1. (a) The intercept on the vertical axis (sales) should be about 5,300, and the line should slope
upward at the rate of about 4 pails per household.
(b) S = 5,283.73 + 4.15//.
(c) About 11,500 pails.
5A-2. (a) Sales = 0.06976 + 3.8398 index.
(b) Since R 2 = 0.9992, and the standard error of estimate (and the confidence intervals) are correspondingly very small, the index is a highly reliable indicator of sales.
(c) 1,859, 1,977, 2,094, 2,211, and 2,329.
(d) 7,139, 7,589, 8,040, 8,491, and 8,941.
5A-3. (a) They seem to be more than will be required.
(b) 1 ,060, 1,044, and 1,028, based on assumptions I made. Your answers will depend on the assumptions you made but should also trend downward like this, following past patterns. 5A-4. (a) 34,732 units.
(b) 32,254 to 37,210.
5A-5. (a) 52.33.
(b) No change.
(c) Yes, if one technician is fired.
(d) Yes, if one technician is fired.
(e) No.
5A-6. (a) 25,634.75.
(b) 20,169 to 23,717.
(c) 25,457.35 to 25,813.15.
5A-7. (a) $1,367 million.
CHAPTER 6