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

question 31

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: For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50.What is the new own price elasticity of demand?

• A)-0.24
• B)-0.43
• C)-0.87
• D)-1.00
• E)-1.26

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Definitions:

Responses

In statistics, the answers or reactions of subjects from a survey or experiment.

Members

Individuals or entities that belong to a group, organization, or set.

Stratified Random Sample

A stratified random sample is a sampling method that divides the population into smaller groups, or strata, and randomly selects samples from each stratum.

Simple Random Sample

A subset of a statistical population in which each member has an equal probability of being chosen, ensuring a representative sample.