LUNAR INTERNATIONAL COLLEGE

INDIVUDAL ASSIGNMENTS FOR MANAGERIAL ECONOMICS

Individual Assignment1
1. Suppose the Vodafone company recruited you as the country manager of the firm. One of
the job descriptions for this position that you were requested is projecting the most likely
future demand for Vodafone telecom company. To do so, you requested the Ethiopian
Telecom company to provide you past and current demand part for the Ethio telecom but
rejected your request. As an alternative option, you decided to use the consumer survey
method to forecast the most likely future demand. Briefly discuss
A. How you could forecast future demand for the Vodafone company
B. While forecasting future demand, the personal interview and questionnaire methods
are the most frequently used methods. Which method would recommend for the
Vodafone firm taking into account the Ethiopian context and why?
C. How do you estimate the most likely future demand for the firm if you use sample
survey method?
Individual Assignment2
2. Suppose you estimated the demand function for the above Vodafone firm using a sample
taken from residents in Addis Ababa as follows:
𝑸𝒅 = 𝟏𝟐 − 𝟏. 𝟐𝟓𝑷𝒙 + 𝟓. 𝟐𝟓𝒀 − 𝟑. 𝟐𝟓𝑷𝒓 where 𝑄 𝑑 , 𝑃𝑥 , 𝑌, and 𝑃𝑟 are the level of quantity
demanded, price of Vodafone voice call fee, the income of the Vodafone telecom potential
customers, and price of Ethiotelecom voice call fee, respectively. Also, assume that all
variables are measure in natural logarithm.
A. Identify and interpret the price, income and cross-price elasticity of demand.
B. What will be your recommendation for the general manager of the Vodafone firm
considering the price elasticity of demand and why?
C. Are the Vodafone voice services substitute or complements to the ethiotelecom voice
services taking into account the above-estimated demand function, not taking into
account what you know or what you expect. What is the message or implication of such
relationship to the general manager?
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INSTRUCTIONS:
❖ Deadline for submission: Individual assignment 1: August 15, 2021.
Individual assignment 2: August 20, 2021
❖ Save the file using your name and section. Example: Abebe_MBA4
❖ Any kind of PLAGIARISM has no excuse.