Question: Consider the following multiplicative demand function where QD = quantity demanded, P = selling price, and Y = disposable income: The coefficient of Y (
Consider the following multiplicative demand function where QD quantity demanded, P selling price, and Y disposable income:
The coefficient of Y ie indicates that all other things being held constant:
a
for a one percent increase in disposable income, quantity demanded would increase by percent
b
for a one unit increase in disposable income, quantity demanded would increase by units
c
for a one percent increase in disposable income quantity demanded would increase by units
d
for a one unit increase in disposable income, quantity demanded would increase by percent
e
none of the above
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