Imagine that you work for the maker of a leading brand of low-calorie microwavable food thatestimates the following demand equation for its product using data from 26 supermarkets aroundthe country for the month of April.Write a four to six (4-6) page paper in which you:1. Compute the elasticities for each independent variable. Note: Write down all ofyour calculations.2. Determine the implications for each of the computed elasticities for the businessin terms of short-term and long-term pricing strategies. Provide a rationale inwhich you cite your results.3. Recommend whether you believe that this firm should or should not cut its priceto increase its market share. Provide support for your recommendation.4. Assume that all the factors affecting demand in this model remain the same, butthat the price has changed. Further assume that the price changes are 100, 200,300, 400, 500, 600 dollars.4.1.Plot the demand curve for the firm.4.2.Plot the corresponding supply curve on the same graph using thesupply function Q = 5200 + 45P with the same prices.4.3.Determine the equilibrium price and quantity.4.4.Outline the significant factors that could cause changes in supplyand demand for the product. Determine the primary manner in which boththe short-term and the long-term changes in market conditions couldimpact the demand for, and the supply, of the product.5. Indicate the crucial factors that could cause rightward shifts and leftward shifts ofthe demand and supply curves.6. Use at least three (3) quality academic resources in this assignment. Note:Wikipedia does not qualify as an academic resource.For a refresher on independent and dependent variables, please go to Sophias Website andreview the Independent and Dependent Variables tutorial, located at– 3
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