4.7 An estimate of the demand function for household furniture produced the following results: F=0.0036 Y1.35R0.19P(−0.37) r2=0.996 where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index The point price elasticity for household furniture is -0.37 or -1.95 or 1.35 or 7.11 and the income elasticity is -0.37 or -1.95 or 1.35 or 7.11 . According to the estimated model, a 10 percent increase in the value of private residential construction per household Increase or decrease the quantity demanded by 1.4 or 1.9 or 5.1 percent.

4.7 An estimate of the demand function for household furniture produced the following results: F=0.0036 Y1.35R0.19P(−0.37) r2=0.996 where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index The point price elasticity for household furniture is -0.37 or -1.95 or 1.35 or 7.11 and the income elasticity is -0.37 or -1.95 or 1.35 or 7.11 . According to the estimated model, a 10 percent increase in the value of private residential construction per household Increase or decrease the quantity demanded by 1.4 or 1.9 or 5.1 percent.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 8E

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