Refer to the Following:
the Following Linear Demand Specification Is $Q = a + b P + c M + d P _ { R }$

question 33

Multiple Choice

Refer to the following:
The following linear demand specification is estimated for Conlan Enterprises, a price-setting firm:
$Q = a + b P + c M + d P _ { R }$
where Q is the quantity demanded of the product Conlan Enterprises sells, P is the price of that product, M is income, and
$P _ { R }$ is the price of a related product. The results of the estimation are presented below:
$\begin{array}{rllll}\text { DEPENDENT VARIABLE: } & Q & \text { R-SQUARE } & \text { F-RATIO } & \text { P-VALUEONF } \\\text { OBSERVATIONS: } 32 & 0.7984 & 36.14 & 0.0001\\\\\text { VARIABLE } & \text { PARAMETER } & \text { STANDARD } & & \\& \text { ESTIMATE } & \text { ERROR } & \text { T-RATIO } & \text { P-VALUE } \\\text { INTERCEPT } & 846.30 & 76.70 & 11.03 & 0.0001 \\\text { P } & -8.60 & 2.60 & -3.31 & 0.0026 \\\text { M } & 0.0184 & 0.0048 & 3.83 & 0.0007 \\\text { PR }& -4.3075 & 1.230 & -3.50 & 0.0016\end{array}$
Assume that the income is $10,000, the price of the related good is $40, and Conlan chooses to set the price of this product at $30.
-At the prices and income given above, Conlan can expect to sell _________units.

• A) 342
• B) 600
• C) 724
• D) 864
• E) 872

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Definitions:

Interest Group Politics

The practice of advocacy and lobbying by organized groups to influence public policy and decision-making to benefit their members or causes.

Electoral Politics

The activities associated with seeking election to public office, including campaigning, debating, and voting.

Collective Action Problem

A situation where individuals in a group have difficulties in achieving their common or group goals due to conflicting self-interests.

Economic Interests

The financial stakes or incentives that individuals, groups, or organizations have in policy decisions or economic conditions.