A sample is a smaller group of members of a population selected to represent the

population. In order to use statistics about the population, the sample must be random.
A random sample is one in which every member of a population has an equal chance of
being selected. A statistic is a characteristic of a sample.

The population parameter can be defined as a quantity or statistical measure which, for any provided
population, is every time fixed and which is used as the value of a variable in any of the general
distribution or frequency function in order to make a descriptive of the given population. A parameter is
a characteristic of a population.

(%QA)) = Percent change in quantity (Q) of product A computed

as [(QA(i) QA(i-1)) / (QA(i-1) + QA(i)) / 2]

(%PB) = Percent change in price (P) of product B computed as

[(PB(i) PB(i-1)) / (PB(i-1) + PB(i)) / 2]

(A)

Random Variables

A random variable, usually written X, is a variable whose possible values are numerical outcomes of a
random sample phenomenon. A sample is a smaller group of members of a population selected to
represent the population. In order to use statistics about the population, the sample must be random
variable. A random sample variable is one in which every member of a population has an equal chance of
being selected. A statistic is a characteristic of a sample.

Population Parameter

The population parameter can be defined as a quantity or statistical measure which, for any provided
population, is every time fixed and which is used as the value of a variable in any of the general
distribution or frequency function in order to make a descriptive of the given population. A parameter is a
characteristic of a population.

Example of random variable and population parameter.

(B)

Given that

log (qi) = 2.3- 0.93 log(P) + 0.54 log(I)

Income I is not dependent on price P. Then, differentiating above equation in regard price is

(dqi/ qi) = -0.93 (dP/ P)

i.e., (dqi/ qi)/(dP/ P) = -0.93

Own-price elasticity of demand

This is a measure of the percentage change in the quantity demanded caused by a percentage change
in price. Because the demand function is an inverse relationship between price and quantity the
coefficient of price elasticity will always be negative.

Own-price elasticity of demand = (dqi/ qi)/(dP/ P)

Hence, Own-price elasticity of demand = -0.93

(C)

Given that

qi = 3.5 - 0.86 Pi, own + 0.55 Pi, sub + 2Ii

Differentiating above equation in regard substitute price is

 (dqi/ qi) = 0.55 (dPi, sub / Pi, sub)

i.e, (dqi/ dPi, sub ) = 0.55 ( qi / Pi, sub)

We know that,

Cross-price elasticity of demand

The relationship between two goods or services. More specifically, it captures the responsiveness of the
quantity demanded of one good to a change in price of another good.

Cross-Price Elasticity of Demand

Where,

Change in quantity A demand (%QA)) = Percent change in quantity (Q) of product A computed as [(Q A(i)
QA(i-1)) / (QA(i-1) + QA(i)) / 2]

Change in price of B (%PB) = Percent change in price (P) of product B computed as [(P B(i) PB(i-1)) /
(PB(i-1) + PB(i)) / 2]

i and (i-1) refer to current and previous demands.

Here, qA means qi and PB means Pi, sub

i.e., Cross-Price Elasticity of Demand = (dqi/ dPi, sub )

= 0.55 ( qi / Pi, sub)

= 0.55*5/3

= 0.917