The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and is the price of a related product.The results of the estimation are presented below: For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50.What is the new own price elasticity of demand?
A)-0.24
B)-0.43
C)-0.87
D)-1.00
E)-1.26

Question

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm:  where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and  is the price of a related product.The results of the estimation are presented below:  For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50.What is the new own price elasticity of demand?
A)-0.24 
B)-0.43 
C)-0.87 
D)-1.00 
E)-1.26

Quizplus · Accepted Answer

The Answer of The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm:  where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and  is the price of a related product.The results of the estimation are presented below:  For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50.What is the new own price elasticity of demand?
A)-0.24 
B)-0.43 
C)-0.87 
D)-1.00 
E)-1.26

The Following Linear Demand Specification Is Estimated for Conlan Enterprises,a