The General Linear Demand Function Below Is Used to Answer $Q _ { d } = a + b P + c M + d P _ { R }$

question 84

Multiple Choice

The general linear demand function below is used to answer questions :
$Q _ { d } = a + b P + c M + d P _ { R }$
where Q_d = quantity demanded, P = the price of the good, M = income,
$P _ { R }$ = the price of a good related in consumption.
-If the current price of a good is $10, market demand is $Q _ { d } = 400 - 20 P$ , and market supply is $Q _ { s } = - 50 + 10 P$ , then

• A) more of the good is being produced than people want to buy.
• B) a lower price will increase the shortage.
• C) at the current price there is excess demand, or a shortage, of 150 units.
• D) Both b and c
• E) All of the above

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Definitions:

Ship Product

The act of sending ordered goods to the purchaser or designated destination, completing the order fulfillment process.

Substitute Similar Products

Refers to the practice of using or offering products that are comparable in functionality and quality to the original specified product, to cope with shortages or to provide cost benefits.

Supply Chain Responsiveness

The ability of a supply chain to adapt quickly and efficiently to changes in the market environment, customer preferences, or supply disruptions.

Service Level

A measure of the quality of service provided, often evaluated by the speed and reliability with which a service is delivered.