Consider the following linear demand function where QD = quantity demanded, P = selling price, and Y = disposable income: QD = -36 - 2.1P + .24Y. The coefficient of Y (i.e., .24) indicates that (all other things being held constant): * for a one percent increase in disposable income, quantity demanded would increase by 0.24 percent for a one unit increase in disposable income, quantity demanded would increase by 2.1 units for a one percent increase in disposable income, quantity demanded would decline by 2.1 percent for a one percent increase in disposable income, quantity demanded would decline by 0.24 percent
Consider the following linear demand function where QD = quantity demanded, P = selling price, and Y = disposable income: QD = -36 - 2.1P + .24Y. The coefficient of Y (i.e., .24) indicates that (all other things being held constant): * for a one percent increase in disposable income, quantity demanded would increase by 0.24 percent for a one unit increase in disposable income, quantity demanded would increase by 2.1 units for a one percent increase in disposable income, quantity demanded would decline by 2.1 percent for a one percent increase in disposable income, quantity demanded would decline by 0.24 percent
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the following linear demand function where QD = quantity demanded, P = selling price, and Y = disposable income: QD = -36 - 2.1P + .24Y. The coefficient of Y (i.e., .24) indicates that (all other things being held constant): *
for a one percent increase in disposable income, quantity demanded would increase by 0.24 percent
for a one unit increase in disposable income, quantity demanded would increase by 2.1 units
for a one percent increase in disposable income, quantity demanded would decline by 2.1 percent
for a one percent increase in disposable income, quantity demanded would decline by 0.24 percent
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