The estimated demand for a good is, Q =25 - 5P+ 0.32M+ 12Pr, where Q is the quantity demanded of the good, P is the price of the good, M is income, and Pr is the price of related good.
1. The coefficient on P is?
2. The good is?
3. This good and related good R are?
4. If income decreases by $1000, all else constant, quantity demanded will_______ by __________
5. If the price of the good falls by $4, the quantity demanded will_____ by _______units.
The estimated demand for a good is, Q =25 - 5P+ 0.32M+ 12Pr, where Q is the quantity demanded of the good, P is the price of the good, M is income, and Pr is the price of related good.
1. The coefficient on P is?
2. The good is?
3. This good and related good R are?
4. If income decreases by $1000, all else constant, quantity demanded will_______ by __________
5. If the price of the good falls by $4, the quantity demanded will_____ by _______units.
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Could anyone help me understand how to go about solving this question? I would also like to learn how to set it up. Thank you.
1) Suppose the market demand curve for a good is represented by the linear equation Q = 100 - 0.5P. If the market price were to decrease from P = $40 to P = $30, then holding all other factors constant:
| A) | the quantity demanded would increase by 10 units and total expenditures on the good would increase by $300 |
| B) | the quantity demanded would increase by 5 units and total expenditures on the good would decrease by $650 |
| C) | the quantity demanded would increase by 85 units and total expenditures on the good would increase by $2550 |
| D) | the quantity demanded would decrease by 15 units and total expenditures on the good would decrease by $450 |
| E) | the quantity demanded would decrease by 5 units and total expenditures on the good would increase by $150 |
| F) | the quantity demanded would decrease by 25 units and total expenditures on the good would increase by $750 |
