Consider the following linear demand function where QD = quantity demanded, P = selling price, and Y = disposable income: QD = -36 - 2.1P + .24Y. The coefficient of Y (i.e., .24) indicates that (all other things being held constant): * for a one percent increase in disposable income, quantity demanded would increase by 0.24 percent for a one unit increase in disposable income, quantity demanded would increase by 2.1 units for a one percent increase in disposable income, quantity demanded would decline by 2.1 percent for a one percent increase in disposable income, quantity demanded would decline by 0.24 percent

Consider the following linear demand function where QD = quantity demanded, P = selling price, and Y = disposable income: QD = -36 - 2.1P + .24Y. The coefficient of Y (i.e., .24) indicates that (all other things being held constant): * for a one percent increase in disposable income, quantity demanded would increase by 0.24 percent for a one unit increase in disposable income, quantity demanded would increase by 2.1 units for a one percent increase in disposable income, quantity demanded would decline by 2.1 percent for a one percent increase in disposable income, quantity demanded would decline by 0.24 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

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 6E

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