The Estimated Demand for a Good Is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$

question 64

Multiple Choice

The estimated demand for a good is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$ 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 negative.
• B)a normal good since the coefficient on \(P _ { R }\) is negative.
• C)a normal good since the coefficient on M is greater than one (in absolute value).
• D)an inferior good since the coefficient on M is negative.
• E)none of the above

---

Definitions:

Desired Balance

The optimal amount of funds an individual or business aims to maintain in an account.

Excess (Deficiency)

The amount by which actual income exceeds or falls short of the budgeted amount.

Cash Budget

A financial tool used by businesses to plan for their cash inflows and outflows over a specific period to manage liquidity.

Budgeted Disbursements

Forecasted cash outflows for a specific period, often part of a company's cash budget and crucial for managing liquidity.