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Economics 4 Pages

# Factors That Influence Fast Food Purchases In Uae

##### Question

MANAGERIAL ECONOMICS

http://highered.mheducation.com/sites/0078021715/student_view0/student_workbook.html

How to use excel regression solver

http://archives.math.utk.edu/ICTCM/VOL13/C013/paper.html

Read the case carefully use all the information available in the case to answer the given questions. All questions must be answered with proper explanation using theoretical relationship. Student is expected to use Excel Solver to calculate regression equation and the print out of the results to be attached as annexure. Use the results to analyze the case.

Case study: Estimate the demand for Pizza Firm in UAE:

Pizza HUB company in UAE one of the firm which delivers pizza and serves the major towns in UAE. The Manager of the Pizza firm knows that his customers from the cross segments by nationalities ranging from Asian expatriate community, Arab expatriates and other nationalities are rather price-conscious. Cultural factors observed among these nationalities have different characteristics towards buying pizzas, accessibility, occasions, birthday, get together and other important among the youngsters Pizza buyers in UAE pay close attention to the price charged for a home delivered pizza and the price charged by the competitor.

The manager decides to estimate the empirical demand function for the firms Pizza. Manager collects data on the last 24 months of Pizza sales from the records of the company. The details of the data collected are price that is charged for the time period and price charged by competitors. The manager also managed to collect average household income figures from the UAE statistics sources. The other competitor in Pizza range whose price is also collected, other competitors who sells fast food products in the same range is McDonald’s, therefore the manager also got the prices for Big Mac for the last 24 months from the advertisements in old newspapers. He adjusts the price and income data for the effects of inflation by deflating the currency figures using a deflator obtained from the survey of current UAE statistics website. To measure the number of buyers in the market area (N), he collected data on the number of residents in UAE. Since the number of residents had not changed much during the last 24 months, he has dropped N from the specification of the demand. The data collected is presented below:

 Number of months Quantity Prices of M: income Price of competitors  Pizza Price of BMac 1 26590 31.57 93.075 38.507 4.56 2 28700 31.57 93440 38.1425 4.927 3 28750 31.57 93805 37.777 5.67 4 28490 31.57 94790.5 37.595 3.98 5 28420 31.57 94790.5 37.595 3.47 6 28160 31.57 94790.5 37.412 3.47 7 30390 27.375 94790.5 37.412 3.10 8 30590 27.375 94717.5 37.047 4.197 9 30400 27.375 94717.5 36.5 4.562 10 30900 27.375 95338 36.5 6.387 11 29340 31.025 95338 37.412 6.387 12 29420 31.025 95338 37.412 6.75 13 28340 31.025 95630 35.587 5.475 14 25170 36.46 96177.5 35.587 4.015 15 25030 36.46 96542.5 35.222 3.832 16 25020 36.46 26350 35.04 4.56 17 25570 37.41 26850 36.64 2.0075 18 25860 37.41 27350 37.376 2.0075 19 26230 37.41 27350 37.23 4.197 20 26330 35.58 27950 36.5 4.197 21 27210 35.58 28159 36.865 2.0075 22 27290 35.58 28264 36.865 2.0075 23 27910 35.58 27444 36.865 4.38 24 28210 35.58 28500 37.41 4.38

From the above data:

1. Explain Fast food buying behavior in UAE? What are the important factors, you observed while buying, influence the purchases among various nationalities in UAE.

2. Establish the regression demand equation to estimate and explain the results after running regression analysis.   ( https://www.youtube.com/watch?v=CFbKXx9w6E0) helpful link

3. Calculate estimated demand elasticities, observe the results for price elasticity, income elasticity and cross elasticity and explain the results of elasticity under each type of elasticity and the nature of market.

4. How are the competitors Pizza and Big Mac performing in terms of sales?

5. Estimate the demand for Pizza Hub considering price of pizza is raised to AED 33.03, incomes rise to AED 97236, the competitor’s prices rise to 36.938 and price of Big mac is 4.197.

6. Treating the months as time period forecast the demand for the 40###sup month.

##### Solution

Title: Factors That Influence Fast Food Purchases In Uae
Length: 4 pages (1197 Words)
Style: MLA

Preview

Question one

There are a number of factors that influence fast food purchases in UAE. These are cultural, social, personal and psychological factors.

Cultural factors

The cultural factors are related to the life that the people in UAE live. People will avoid some kind of food due to the influence from their relatives, family members or even friends. A good example is inviting people for a dinner at your home. Other societies will prefer visiting the home while others will consider buying visiting a certain restaurant and share the supper there. Cultural believes will prevent people from taking certain foods. For instance foods from pigs may be a taboo to Muslims. This will affect the demand of the food.

Social factors

Social life will influence the purchasing of food by the people in UAE. The people can be influenced by the group they are living with. The people in a certain group will mostly purchase certain type of food. If a member tries to join the group, he or she will be influenced and end up consuming the type of food. These social factors will be affected by friend life groups, family as well and social roles and status.

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