Midterm Assignment: Managerial Economics

Student name:............................................
Class:..........................................................
Date: ...........................................................
Time: 60 minutes

Branded Products, Inc., based in Oakland, California, is a leading producer and marketer of household
laundry detergent and bleach products. About a year ago. Branded Products rolled out its new Super
Detergent in 30 regional markets following its success in test markets. This isn’t just a ’me too’ product
in a commodity market. Branded Products’ detergent contains Branded 2 bleach, a successful laundry
product in its own right. At the time of the introduction, management wondered whether the company
could successfully crack this market dominated by Procter & Gamble and other big players. The following
spreadsheet shows weekly demand data in these 30 regional markets:

1. Determine the Demand Function based on four independent variables including: Price per case,
competitor price, Advertising, and Household income.

2. Interpret the coefficient estimate for each respective independent variable.

3. Forecast weekly demand in five new markets with the following characteristics: