The Demand for Video Recorders Has Been Estimated to Be

question 65

Multiple Choice

The demand for video recorders has been estimated to be Q_v = 134 - 1.07P_f + 46P_m -2.1P_v - 5I, where Q_v is the quantity of video recorders, P_f denotes the price of video recorder film, P_m is the price of attending a movie, P_v is the price of video recorders, and I is income.Based on the estimated demand equation we can conclude:

• A)video recorders are inferior goods.
• B)video recorder film is a substitute for video recorders.
• C)the demand for video recorders is inelastic.
• D)the demand for video recorders are neither inferior nor inelastic and video recorder film is not a substitute for video recorders.

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Definitions:

Market Size

The total potential sales volume or number of consumers available to a product or service within a given market.

Tax on Sellers

A financial charge imposed on sellers of goods or services, which can affect the supply and pricing of those goods or services.

Tax on Buyers

A levy imposed on consumers by the government, which typically raises the purchase price of goods and services, affecting demand.

Shortage

A situation in which the demand for a product or service exceeds the supply available at a specific price.