Sic: = . Dat: Suppose that Tata's consultant echmated tne following regression Merton for Indica _gutemebides : @, = 100,000 - 1000, + 2, CON 4 SOT + 30Pm ~1,000Pp t3A t 40, 000 Pr a) The number of Indicas purchased per year (G1) declines by loo units fr each Gl increase in the price of Indicas (Pr), increases by 2000 units foreach | million increase in pepulabon (N), increases by 50units for each 41 increase in per Capita disposable income (1), and incréases by 30 units for each dollar elas athe price pf Marutis (Pm. On the other hand, G, declines by 1,000 for each leent increase in tne price of petrol (Pp? increases by Zunits for each $1 increas-€ in advertising expenditures on Tndicas CA), and increases by 40/000 units for each | percentage cant eduction in tue rate of interest charged fo borrow te purchase Tndicas (Pi) 1b) To Gind the value of Q,, we substhte the average value of te independent or explanatory Variables into the eshmated demand function [thus, for Py = §4,000,N 2200 million , T= B10, 000 , Pm> 8,000 P, =80cents, A= #200, 00 and P, +! percentage , we have Qy2 100,000 - 100(4,, 000) + 2, 000 (200) + $010,000) +30 ( 8, 000) | = 1,000(80) + 3 (200,000) 4 4000001) _2 100,000 - 900,000 +4 400,000 + 500 000 + 240/000 - 80, 000+ 600.000 + 40,000 = 400,000. @) Te derive the equation fr the demand curve for Indicas, we subshhte inte the [estimated demand equation the average value of all tre independent or explanatory Variables given above with tne exception of P,. Thus , he eqpation of demand curve for Indicas is Qz 100,000 -100P¢ + 2,0006200)+ 50L 10,000) + 30( 8,006) — 1, 000/80) + 3(200,000) + 40, 000¢1) cacelem Dogg} ec Re