This function, illustrated in general in Figure 4.5, is called a log-linear demand
function because it can be transformed into a linear function by taking the logarithms
of all the variables in the equation. This function is also called a constantelasticity
demand function because the elasticities are constant for all values of the
demand variables and are represented by the exponents, b and c, in Equation 4.9.29
Thus, the price and advertising elasticities can be read directly from the statistical
results if this type of function is used in the estimation process. No further calculations
are needed to determine the elasticities. This function may also better represent
consumer behavior in certain cases because it implies that as price increases,
quantity demanded decreases, but does not go to zero.
This function, illustrated in general in Figure 4.5, is called a log-linear demandfunction because it can be transformed into a linear function by taking the logarithmsof all the variables in the equation. This function is also called a constantelasticitydemand function because the elasticities are constant for all values of thedemand variables and are represented by the exponents, b and c, in Equation 4.9.29Thus, the price and advertising elasticities can be read directly from the statisticalresults if this type of function is used in the estimation process. No further calculationsare needed to determine the elasticities. This function may also better representconsumer behavior in certain cases because it implies that as price increases,quantity demanded decreases, but does not go to zero.
การแปล กรุณารอสักครู่..