The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: Assume that the income is $10,000,the price of the related good is $40,and Conlan chooses to set the price of this product at $30.At the prices and income given above,what is the price elasticity of demand?
A)-0.43
B)-0.86
C)-1.00
D)-1.43
E)-2.40

Question

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below:  Assume that the income is $10,000,the price of the related good is $40,and Conlan chooses to set the price of this product at $30.At the prices and income given above,what is the price elasticity of demand?
A)-0.43 
B)-0.86 
C)-1.00 
D)-1.43 
E)-2.40

Quizplus · Accepted Answer

The Answer of The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below:  Assume that the income is $10,000,the price of the related good is $40,and Conlan chooses to set the price of this product at $30.At the prices and income given above,what is the price elasticity of demand?
A)-0.43 
B)-0.86 
C)-1.00 
D)-1.43 
E)-2.40

The Following Linear Demand Specification Is Estimated for Conlan Enterprises,a Q=a+bP+cM+dPRQ = a + b P + c M + d P _ { R }Q=a+bP+cM+dPR​

The Following Linear Demand Specification Is Estimated for Conlan Enterprises,a $Q = a + b P + c M + d P _ { R }$