A Regression Analysis Linking Demand (Y in 1000 Units) and Price

question 91

Multiple Choice

A regression analysis linking demand (y in 1000 units) and price (x in $) resulted in the following equation: estimated Y = 9 - 3x.This equation implies that if the price is decreased by $1, demand can be expected to:

• A)increase by 9,000 units
• B)decrease by 9,000 units
• C)decrease by 3,000 units
• D)increase by 3,000 units
• E)none of the above

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Definitions:

Cost Method

An accounting method used to value inventory or investments at their original purchase cost.

Equity Method

An accounting technique used by a company to record its investment in another company.

Unrealized Gain/Loss

A profit or loss that results from holding an investment that has not yet been sold, and thus, the gain or loss is not reflected in the financial statements.

Government Bonds

Debt securities issued by a government to support government spending, considered low-risk investments since they are backed by the taxing power of the issuing government.