major economics assignment
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کاردان پوهنتونKardan
UniversityMBA
DepartmentData for Demand Regression Analysis Roshan Company ( 2004-
2014 )
Group Member’s : Reg# : NO
Mohammad Nadim 902-1411030Matiullah 902-1411074Ali Yar 902-1411001Nasim Jafari 902-1411006
Table Of content
1. Roshan Company Profile 2. Data for Demand regression analysis 3. Regression analysis calculation 4. Quantity Demand for Roshan company in 2013 5. Independent factors elasticity 6. Situation No ONE 7. Situation No TWO 8. Situation No THREE 9. Situation No FOUR 10. Situation No FIVE
Roshan is Afghanistan’s leading telecommunication provider, serving nearly 6.0 millions active subscriber’s.
In January 2003, Roshan was awarded the second GSM License in Afghanistan.
Today Roshan GSM Network reaches 240 cities and towns across all over Afghanistan and 34 Provinces, Roshan network covers 60% of population including the remote rural areas.
Roshan is the largest investor , Private company and taxpayer in Afghanistan. It has invested over 600$ millions in telecommunications infrastructure in Afghanistan…
After the calculatoins we have come up with:Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Where:
Qr = Quantity demanded per year of Roshan in million hour talk
P = Price of roshan talk/minute in Afghanis
A = Advertising expenditure by Roshan Compnay, in AFN per year.
N = Population of Afghanistan in Million
C = Number of competitors in Afghanistan Market
Ps = Price of Simcard in Afghanis
Pc = Price of a moderat (ordinary) cellphone in Afghanis
Pa = Price of AWCC talk/minute in Afghanis
Lets find out the value of Qr using the date for the year 2013 from the table:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 171.4
Now lets find out all elasticities with respect to Qr
Ep = -69(2.5/171.4) = -1
Ea = 2.8(5/171.4) = 0.08
En = 0.3(30.55/171.4) = 0.05
Ec = -3.7(5/171.4) = -0.11
Eps = -0.13(75/171.4) = -0.06
Epc = -0.007(1500/171.4)= -0.06
Epa = 13(2.5/171.4) = 0.19
Situation # ONE
What will be the new quantity demand if Roshan company charged:
AFA 2.40
AFA 2.50
AFA 2.60
Per minute talk assuming all other factors to be constant for the moment
In case 2.4 AFA, Qr will be:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.4) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 178.3
In case 2.5 AFA, Qr will be:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 171.4
In case 2.6 AFA, Qr will be:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.6) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 164.5
Now we can easily draw the demand and price graph for Roshan company
Situation # TWO
What would be the new quantity demand for Roshan company if two new companies would have entered into the Market in 2013?
As it was calculated for the year 2013:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 171.4
Now we will increase the number of companies from 5 to 7 in the formula:
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(7) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 164
Results: The quantity demand for Roshan would be decreased by 7.4 million hour talk/year in
2013, if two new companies would have entered in to Afghanistan market.
Situation # THREE
Assuming all other factors constant, what would be the new quantity demand for Roshan if AWCC lowered its price to 2 Afghanis / minute talk, in the year 2013
As it was calculated for the year 2013:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 171.4
Now we will deacreas the price of AWCC from 2.5 AFA to 2 AFA in the formula:
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2)
Qr = 164.9
Results:The quantity demand for Roshan would be decreased by 6.5 million hour talk/year in 2013, if the price of AWCC would have decreased from 2.5 AFA to 2 AFA
Situation # FOUR
What would be the new quantity demand for Roshan company if the price of a moderat cell phone would have decreased from 1500 AFA to 1000 AFA the market in 2013?
As it was calculated for the year 2013:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 171.4
Now we will deacreas the price of the cellphone from 1500 AFA to 1000 AFA in the formula:
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1000) + 13(2.5)
Qr = 174.9
Results:The quantity demand for Roshan would be increased by 3.5 million hour talk/year in 2013, if the price of the cellphone would have decreased from 1500 AFA to 1000 AFA.
Situation # FIVE
Assuming all other factors constant, what would be the new quantity demand for Roshan if 2.5 million people would have immigrated from Afghanistan in the year 2013
As it was calculated for the year 2013:
Qr = 327 – 69P + 2.8A + 0.3N – 3.7C – 0.13Ps – 0.007Pc + 13Pa
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(30.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 171.4
Now we will deacreas the population number from 30 to 27.5 in the formula:
Qr = 327 – 69(2.5) + 2.8(5) + 0.3(27.5) – 3.7(5) – 0.13(75) – 0.007(1500) + 13(2.5)
Qr = 170.5
Results:The quantity demand for Roshan would be decreased by 0.9 million hour talk/year in 2013, if the number of population would have decreased from 30.5 AFA to 27.5 AFA
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