Page 1 of 2

NAME: _______________________ Date: ________________

Course: ______________________ Score: _______________
Professor: _____________________

BE 313: MANAGERIAL ECONOMICS

CASE 1

Below is the data of Mister Siomai, a food establishment in Roxas Mall. Analyze the given
data using the concept of elasticity of demand

Consumers’ Price of
Price/
Sales Average Special Hopia
Serving
(in Quantity) Income per Box
(in PhP)
(in PhP) (in PhP)
4,141 59 5,086 54
3,842 59 2,502 55
3,056 59 2,010 55
3,519 59 2,415 55
4,226 59 3,043 52
4,630 59 3,423 52
3,507 60 2,422 55
3,754 60 2,672 55
5,000 60 5,775 58
5,120 60 7,854 58
4,011 60 2,631 52
5,015 60 6,324 52
1,916 79 1,646 59
675 79 750 65
725 79 800 65
644 79 920 65

INSTRUCTIONS:

1. In a Microsoft excel, key in all the data below and derived the demand function using
multiple linear regression.
2. What is the value of r-square? Interpret! (To answer this question, research on how to
interpret r2 )
3. Using the derive demand function in #1, while holding other factors to be constant, if
price of siomai per serving changes to P65, what is the price elasticity of demand?
4. With your answer in #3, will changing of price significantly to P65 affects the total
revenue of Mr. Siomai establishment? Explain
5. Using the derive demand function in #1, while holding other factors to be constant, if
consumers’ average decrease to P3,125, what is the income elasticity of demand for
siomai?
6. With your answer in #5, what kind of good is siomai? Explain!
7. Using the derive demand function in #1, while holding other factors to be constant, if
price of hopia per box increases to P67, what is the cross-price elasticity of demand
for siomai?
8. With your answer in #7, what kind of related good is hopia? Explain!

“Our greatest weakness lies in giving up. The most certain way to succeed is
to always try one more time.” ~ Thomas Edison

“Happiness does not come from doing easy work, but from the afterglow of satisfaction that comes after the achievement of a
difficult task that demanded one’s best.” ~ Theodore Isaac Rubin
 Page 2 of 2

NAME: _______________________ Date: ________________

Course: ______________________ Score: _______________
Professor: _____________________

BE 313: MANAGERIAL ECONOMICS

CASE 2

SCENARIO: You are hired as the new manager/accountant of a flower shop in Davao City.
Your first task is to analyze the data below for an appropriate and strategic action to increase
the profit of the flower shop. To do this, you must concept of elasticity of demand and supply
will help as an input to your courses of action.

Table 1. Hypothetical data of flowershop.

Point Price of Qd of Price of Fertilizer for Consumer
(Time) Flower/boquet Flower/bouquet Candle/piece Flower/bag Income (I)
A 100 40 40 70 10,000
B 330 32 60 90 15,000
C 500 20 70 110 20,000

Compute and interpret the following (5 points for solutions and 10 points for interpretations):
1. Own price elasticity of demand (ξdp) C→A
2. Based from your answer in #1, will you recommend increasing the price increase of flower? Will
there be a significant change in total revenue? Explain.
3. Income elasticity of demand (ξID) A→C; (what kind of good is flower, inferior or normal good?)
4. Cross-price elasticity of demand (ξxy) B→C; (what kind of good is candle, substitute or
complementary?)
5. Input price elasticity of supply (ξIP) A→B

“Our greatest weakness lies in giving up. The most certain way to succeed is
to always try one more time.” ~ Thomas Edison

“Happiness does not come from doing easy work, but from the afterglow of satisfaction that comes after the achievement of a
difficult task that demanded one’s best.” ~ Theodore Isaac Rubin