The Demand for Personal Computers Has Been Estimated to Be

question 31

Multiple Choice

The demand for personal computers has been estimated to be Q = 500,000 - 700P + 200I - 500S.Assume that per capita income I is $13,000 and the average price of software S is $400.When the price of personal computers is P = $3,000,the price elasticity of demand is:

• A) -2.625.
• B) -7.0.
• C) -1.0.
• D) -21.0.
• E) -4.25.

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Definitions:

Salivation

The production and release of saliva from the salivary glands in the mouth, often in response to the sight, smell, or taste of food.

Pavlovian Conditioning

A type of learning in which a neutral stimulus comes to elicit a response after being associated with a stimulus that naturally produces that response.

Craving Beer

A strong desire or urge to consume beer, often resulting from psychological factors, social situations, or physiological dependence.