The Demand for Video Recorders Has Been Estimated to Be

question 100

Multiple Choice

The demand for video recorders has been estimated to be 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:

Fixed Manufacturing Cost

Overheads that do not change with the level of manufacturing output, including salaries of permanent staff and rent.

Annual Impact

The effect or influence that something has over the course of a year, often used in the context of financial, environmental, or social effects.

Net Operating Income

The total profit of a business after subtracting operating expenses but before deducting taxes and interest.

Future Costs

Costs that are expected to be incurred in upcoming periods.