A log form demand function for carpet was estimated with the following results:
Where Q = square feet of carpet
P = Price of carpet
W = average price of wood flooring
Y = Median Income
R = average size of housing units
Using the above information:
A) when income increases, people will purchase more carpet
B) when income increases, people will purchase less wood flooring
C) wood flooring and carpet are complementary goods
D) wood flooring and carpet are substitute goods
E) none of the above

Question

A log form demand function for carpet was estimated with the following results: 
Where Q = square feet of carpet
P = Price of carpet
W = average price of wood flooring
Y = Median Income
R = average size of housing units
Using the above information:
A) when income increases, people will purchase more carpet 
B) when income increases, people will purchase less wood flooring 
C) wood flooring and carpet are complementary goods 
D) wood flooring and carpet are substitute goods 
E) none of the above

Quizplus · Accepted Answer

The Answer of A log form demand function for carpet was estimated with the following results: 
Where Q = square feet of carpet
P = Price of carpet
W = average price of wood flooring
Y = Median Income
R = average size of housing units
Using the above information:
A) when income increases, people will purchase more carpet 
B) when income increases, people will purchase less wood flooring 
C) wood flooring and carpet are complementary goods 
D) wood flooring and carpet are substitute goods 
E) none of the above

A Log Form Demand Function for Carpet Was Estimated with the Following