# Sun Computer workstations gathered average monthly sales gures from its 56 branch oces and dealership across the country and estimated the following…

3. Sun Computer workstations gathered average monthly sales gures from its56 branch oces and dealership across the country and estimated the followingdemand (sales) for its product:Q = 15000 ô€€€ 2:5P + 150A + 0:3Ppc + 0:35Pm + 0:2Pc(2:87) (ô€€€2:17) (0:67) (2:5) (2:06) (1:54)Adjusted R2 = 0:68 and standard error of the whole model, Se = 786: Numbersin the parenthesis are t-statistics. The variables and their assumed values are_Q=Quantity, P=Price of a workstation=7000, A=Advertising expenditures (inthousands)=52, Ppc=Average price of a personal computer=4000, Pm=Averageprice of a minicomputer=15000, Pc=Average price of a leading competitor’sworkstation=8000a. Which of the variables are statistically signicant at the 5 %level (or %95condence level)?b. Compute the price elasticity and advertising elasticity. Interpret each one.c. What is the predicted range of demand for Sun workstations with 95 percentcondence level.d. You have become concerned that the rm’s sales are currently lower thanthe prot maximizing level, given the marginal cost of \$1500 per workstation.Control whether your concern is valid and suggest a new pricing strategy: (in-crease/decrease/no change) the current price!