- 5 Exercise 4 5 General Cereals Is Using A Regression Model To Estimate The Demand For Tweetie Sweeties A Whistle Shape 1 (52.48 KiB) Viewed 8 times
5. Exercise 4.5 General Cereals is using a regression model to estimate the demand for Tweetie Sweeties, a whistle-shaped, sugar-coated breakfast cereal for children. The following (multiplicative exponential) demand function is being used: QD=6,280 P(-1.85) A1.05N2.70QD-6,280 P-1.85A1.05N2.70 where QDQD quantity demanded, in 10-oz boxes PP = price per box, in dollars AA = advertising expenditures on daytime television, in dollars NN = proportion of the population under 12 years old, in percent What is the point price elasticity of demand for Tweetie Sweeties? 1.05 2.70 -1.76 -1.85 What is the advertising elasticity of demand? 2.70 1.05 0.39 -1.85 According to the estimated model, a percent increase in the proportion of the population under 12 years old the quantity demanded by percent.