Estimated Demand for a Good Is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$

question 6

Multiple Choice

estimated demand for a good is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.The good is

• A)an inferior good since the coefficient on \(P _ { R }\) is positive.
• B)a normal good since the coefficient on \(P _ { R }\) is positive.
• C)an inferior good since the coefficient on M is greater than one.
• D)a normal good since the coefficient on M is positive.
• E)none of the above

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Definitions:

Circular Flow Model

An economic model illustrating the continuous flow of goods, services, and money between households and businesses in an economy.

Public Agency

An organization operated by the government to manage specific functions or provide services such as education, health, or transportation.

Business Structure

The legal and organizational framework chosen by a company that defines its operations, liabilities, responsibilities, and regulatory obligations.

Sole Proprietorship

An unincorporated firm owned and operated by one person.