1.Let’s examine the history of LSUS undergraduate enrollment vs. its tuition and
ID: 1106741 • Letter: 1
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1.Let’s examine the history of LSUS undergraduate enrollment vs. its tuition and fees. Download the “A3Q1 LSUS enrollment data” Excel file (in CSV format if you don’t have Excel); in it you will see historical information on LSUS undergraduate enrollment, total credit hour production, and tuition and fees. (If you wish, you can verify or look up additional information here and here.)Calculate annual elasticities for both types of quantity variables (i.e., you will have an elasticity of price vs. headcount, and one of price vs. credit hour). You will get an error message in your calculations a few times when the tuition doesn't change, since the elasticity calculation will be trying to divide by zero; just delete those in your Excel table so that the cells are blank. The first headcount elasticity will be calculated based on the 1992 and 1993 values of tuition and headcount and should be about -0.122; the first credit hour elasticity will also be based on the 1992 and 1993 values and should be about -0.226). Calculate the average elasticity for headcount (from 1993-2016), and the average elasticity for credit hour (from 1993-2016). Many administrators argue that, to increase revenue to LSUS to cover budget shortfalls, tuition should be raised. Comment on this suggestion, using the evidence you’ve uncovered. 2.Copy and paste the following data into Excel: P Q $4.80 1170 $4.53 1235 $3.98 1337 $3.72 1442 $3.49 1548 a.Run OLS to determine the inverse demand function (P = f(Q)); how much confidence do you have in this estimated equation? Use algebra to then find the direct demand function (Q = f(P)). b.Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination. c.What is the point price elasticity of demand when P=$3.98? What is the point price elasticity of demand when P=$3.81? d.To maximize total revenue, what would you recommend if the company was currently charging P=$4.53? If it was charging P=$3.81? e.Use your indirect demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis. f.What is the total-revenue maximizing price and quantity, and how much revenue is earned there? Compare that to the TR when P = $4.80 and P = $3.81. 1.Let’s examine the history of LSUS undergraduate enrollment vs. its tuition and fees. Download the “A3Q1 LSUS enrollment data” Excel file (in CSV format if you don’t have Excel); in it you will see historical information on LSUS undergraduate enrollment, total credit hour production, and tuition and fees. (If you wish, you can verify or look up additional information here and here.)
Calculate annual elasticities for both types of quantity variables (i.e., you will have an elasticity of price vs. headcount, and one of price vs. credit hour). You will get an error message in your calculations a few times when the tuition doesn't change, since the elasticity calculation will be trying to divide by zero; just delete those in your Excel table so that the cells are blank. The first headcount elasticity will be calculated based on the 1992 and 1993 values of tuition and headcount and should be about -0.122; the first credit hour elasticity will also be based on the 1992 and 1993 values and should be about -0.226). Calculate the average elasticity for headcount (from 1993-2016), and the average elasticity for credit hour (from 1993-2016). Many administrators argue that, to increase revenue to LSUS to cover budget shortfalls, tuition should be raised. Comment on this suggestion, using the evidence you’ve uncovered. 2.Copy and paste the following data into Excel: P Q $4.80 1170 $4.53 1235 $3.98 1337 $3.72 1442 $3.49 1548 a.Run OLS to determine the inverse demand function (P = f(Q)); how much confidence do you have in this estimated equation? Use algebra to then find the direct demand function (Q = f(P)). b.Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination. c.What is the point price elasticity of demand when P=$3.98? What is the point price elasticity of demand when P=$3.81? d.To maximize total revenue, what would you recommend if the company was currently charging P=$4.53? If it was charging P=$3.81? e.Use your indirect demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis. f.What is the total-revenue maximizing price and quantity, and how much revenue is earned there? Compare that to the TR when P = $4.80 and P = $3.81. 1.Let’s examine the history of LSUS undergraduate enrollment vs. its tuition and fees. Download the “A3Q1 LSUS enrollment data” Excel file (in CSV format if you don’t have Excel); in it you will see historical information on LSUS undergraduate enrollment, total credit hour production, and tuition and fees. (If you wish, you can verify or look up additional information here and here.)
Calculate annual elasticities for both types of quantity variables (i.e., you will have an elasticity of price vs. headcount, and one of price vs. credit hour). You will get an error message in your calculations a few times when the tuition doesn't change, since the elasticity calculation will be trying to divide by zero; just delete those in your Excel table so that the cells are blank. The first headcount elasticity will be calculated based on the 1992 and 1993 values of tuition and headcount and should be about -0.122; the first credit hour elasticity will also be based on the 1992 and 1993 values and should be about -0.226). Calculate the average elasticity for headcount (from 1993-2016), and the average elasticity for credit hour (from 1993-2016). Many administrators argue that, to increase revenue to LSUS to cover budget shortfalls, tuition should be raised. Comment on this suggestion, using the evidence you’ve uncovered. 2.Copy and paste the following data into Excel: P Q $4.80 1170 $4.53 1235 $3.98 1337 $3.72 1442 $3.49 1548 a.Run OLS to determine the inverse demand function (P = f(Q)); how much confidence do you have in this estimated equation? Use algebra to then find the direct demand function (Q = f(P)). b.Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination. c.What is the point price elasticity of demand when P=$3.98? What is the point price elasticity of demand when P=$3.81? d.To maximize total revenue, what would you recommend if the company was currently charging P=$4.53? If it was charging P=$3.81? e.Use your indirect demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis. f.What is the total-revenue maximizing price and quantity, and how much revenue is earned there? Compare that to the TR when P = $4.80 and P = $3.81. 1.Let’s examine the history of LSUS undergraduate enrollment vs. its tuition and fees. Download the “A3Q1 LSUS enrollment data” Excel file (in CSV format if you don’t have Excel); in it you will see historical information on LSUS undergraduate enrollment, total credit hour production, and tuition and fees. (If you wish, you can verify or look up additional information here and here.)
Calculate annual elasticities for both types of quantity variables (i.e., you will have an elasticity of price vs. headcount, and one of price vs. credit hour). You will get an error message in your calculations a few times when the tuition doesn't change, since the elasticity calculation will be trying to divide by zero; just delete those in your Excel table so that the cells are blank. The first headcount elasticity will be calculated based on the 1992 and 1993 values of tuition and headcount and should be about -0.122; the first credit hour elasticity will also be based on the 1992 and 1993 values and should be about -0.226). Calculate the average elasticity for headcount (from 1993-2016), and the average elasticity for credit hour (from 1993-2016). Many administrators argue that, to increase revenue to LSUS to cover budget shortfalls, tuition should be raised. Comment on this suggestion, using the evidence you’ve uncovered. 2.Copy and paste the following data into Excel: P Q $4.80 1170 $4.53 1235 $3.98 1337 $3.72 1442 $3.49 1548 a.Run OLS to determine the inverse demand function (P = f(Q)); how much confidence do you have in this estimated equation? Use algebra to then find the direct demand function (Q = f(P)). b.Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination. c.What is the point price elasticity of demand when P=$3.98? What is the point price elasticity of demand when P=$3.81? d.To maximize total revenue, what would you recommend if the company was currently charging P=$4.53? If it was charging P=$3.81? e.Use your indirect demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis. f.What is the total-revenue maximizing price and quantity, and how much revenue is earned there? Compare that to the TR when P = $4.80 and P = $3.81.
Explanation / Answer
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Regression Statistics Multiple R 0.982068 R Square 0.964458 Adjusted R Square 0.952611 Standard Error 0.119518 Observations 5 ANOVA df SS MS F Significance F Regression 1 1.162867 1.162867 81.40758 0.002875 Residual 3 0.042853 0.014284 Total 4 1.20572 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 8.854859 0.529256 16.73077 0.000465 7.17053 10.53919 7.17053 10.53919 X Variable 1 -0.00353 0.000391 -9.02261 0.002875 -0.00477 -0.00228 -0.00477 -0.00228 indirect demand Function is P = 8.85-0.0035Q . The p -value for Q is 0 this impliea Q is significant . The R-sq is 96.4% which implies yhe confidence. Direct Demand function = Q = 8.85/0.0035 -(1/0.0035) *P Q = 2528.57 - 285.71PRelated Questions
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