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Author Question: Another commonly used algebraic form for a demand function is the semi-logarithmic functional form, ... (Read 284 times)

Pineappleeh

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on: Jul 1, 2018
Another commonly used algebraic form for a demand function is the semi-logarithmic functional form, log(Q) = a - bP + cI, where Q is quantity demanded, P is the product price, and I is income.
 
  Here, -100b represents the percentage change in quantity demanded given a one unit increase in price. By the Law of Demand, we should expect the value of b to be: A) positive.
  B) negative.
  C) positive or negative.
  D) We do not have enough information to answer this question.

Question 2

Refer to Scenario 10.3. At the profit-maximizing level of output, demand is
 
  A) completely inelastic.
  B) inelastic, but not completely inelastic.
  C) unit elastic.
  D) elastic, but not infinitely elastic.
  E) infinitely elastic.


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scrocafella

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Reply #1 on: Jul 1, 2018
Answer to Question 1

A

Answer to Question 2

D


Pineappleeh

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Reply #2 on: Jul 1, 2018
Correct answers!


scrocafella

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Reply #3 on: Jul 1, 2018
Great! Please up vote :D


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