Question 11 5 pts

The demand function below is estimated using the data generated by a randomized controlled trial:

Lnq_x^d=a+b*Lnp_x+c*Lnp_Y+d*Lnp_z+e

where q_x^d is the quantity demanded of the product of interest (X), p_x is the price of the product of interest (X), p_y is the price of a substitute product (Y), and p_z is the price of a complement product (Z). Also, e is the error term. Parameter b is statistically significant and is estimated to be equal to -0.05, with a very small standard error. A 10 percent increase in p_x is expected to reduce q_x^d by _____ percent. (Note: Round your answer to only one decimal points.)

Question 12 5 pts

Consider the information in Question No. 11. And only focus on parameters c and d. Which one of these two parameters is expected to be greater than zero?

Group of answer choices

Both parameters.

Only parameter d.

The answer depends on whether product x is a normal or an inferior product.

The answer depends on whether product x is a necessity or a luxury product.

Neither of the parameters.

Only parameter c.

Question 13 5 pts

Consider the information in Question No. 11. And only focus on parameters c and d. Which one of these two parameters is expected to be less than zero?

Group of answer choices

Both parameters.

Only parameter c.

The answer depends on whether product x is a necessity or a luxury product.

The answer depends on whether product x is a normal or an inferior product.

Neither of the parameters.

Only parameter d.