(1) 5. General Cereals is using a regression model to estimate the demand for Tweetie Sweeties, a whistle-shaped, sugar-coated breakfast cereal for children. The following (multiplicative exponential) demand function is being used: QD = 6,280P-2.15 A1.05 N3.70 Where QD = quantity demanded, in 10oz. boxes P = price per box, in dollars A = advertising expenditures on daytime television, in dollars N = proportion of the population under 12 years old a) Determine the point price elasticity of demand for Tweetie Sweeties. b) Determine the advertising elasticity of demand. c) What interpretation would you give to the exponent of N? (2) 7. An estimate of the demand function for household furniture produced the following results: F = 0.0036Y1.08R0.16p-0.48 r2 =0.996 Where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index a) Determine the point price and income elasticity’s for household furniture. b) What interpretation would you give to the exponent for R? Why do you suppose R was included in the equation as a variable? c) If you were a supplier to the furniture manufacturer, would you have preferred to see the analysis performed in physical sales units rather than dollars of revenue? How would this change alter the interpretation of the price coefficient, presently estimated as -0.48?