The Following Linear Demand Specification Is Estimated for Conlan Enterprises,a

question 60

Multiple Choice

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and is the price of a related product.The results of the estimation are presented below: Assume that the income is $10,000,the price of the related good is $40,and Conlan chooses to set the price of this product at $30.At the prices and income given above,what is the price elasticity of demand?

• A)-0.43
• B)-0.86
• C)-1.00
• D)-1.43
• E)-2.40

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Definitions:

Mutagen

A chemical or physical agent that interacts with DNA and causes a mutation.

LC50

The lethal concentration of a substance that causes death in 50% of a population of test organisms within a specified period, a common measure in toxicity tests.

Teratogens

Agents or factors that can cause the development of physical defects in an embryo or fetus during pregnancy.

Birth Defects

Birth defects are physical or biochemical abnormalities present at birth that can result in physical, mental, or emotional disability or dysfunction.