The Demand for Video Recorders Has Been Estimated to Linear

question 124

Multiple Choice

The demand for video recorders has been estimated to linear and given by the demand relation Q_v = 145 - 3.2P_v + 7M - 0.95P_f - 39P_m, 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 M is income.Based on the estimated demand equation we can conclude:

• A)video recorders are normal goods.
• B)the demand for video recorders is inelastic.
• C)video recorders are normal goods and the demand for video recorders is inelastic.
• D)video recorders are normal goods and video recorder film is a complement for video recorders.

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Definitions:

Sales Discounts

Sales discounts are reductions in price offered to customers, typically to encourage prompt payment or bulk purchases.

Net Sales

The amount of sales generated by a company after deducting returns, allowances for damaged or missing goods, and any discounts allowed.

Perpetual Inventory System

An accounting methodology that records goods transactions immediately through the use of electronic systems, continuously updating inventory records.

Sales Returns

The process of returning purchased goods to the seller, often resulting in a refund to the buyer and an adjustment in sales revenue for the seller.