The Demand for Good X Is Given by Ln Q_x^d

question 144

Multiple Choice

The demand for good X is given by ln Q_x^d = 120 − 0.9 ln P_x + 1.5 ln P_y − 0.7 ln M.Which of the following statements is correct?

• A) X has constant income elasticity.
• B) An economic downturn will decrease demand for X.
• C) A 15 percent increase in income would increase demand for X by 10.5 percent.
• D) X has a constant income elasticity, and an economic downturn will decrease the demand for X.

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Definitions:

Accounts Receivable Period

The mean amount of time required for a company to receive payments due from its clients.

Sales

The total amount of a company's revenues earned from selling its goods or services.

Collect

Refers to the act of gathering or accumulating items or amounts, often used in the context of collecting payments or data.

Net Cash Flow

Net cash flow is the difference between a company's cash inflows and outflows over a specific period, providing insight into the company's liquidity and financial health.