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Refer to the Following:
the Following Linear Demand Specification Is Q=a+bP+cM+dPRQ = a + b P + c M + d P _ { R }

Question 39

Multiple Choice

Refer to the following:
The following linear demand specification is estimated for Conlan Enterprises, a price-setting firm:
Q=a+bP+cM+dPRQ = a + b P + c M + d P _ { R }
where Q is the quantity demanded of the product Conlan Enterprises sells, P is the price of that product, M is income, and
PRP _ { R } is the price of a related product. The results of the estimation are presented below:
 DEPENDENT VARIABLE: Q R-SQUARE  F-RATIO  P-VALUEONF  OBSERVATIONS: 320.798436.140.0001 VARIABLE  PARAMETER  STANDARD  ESTIMATE  ERROR  T-RATIO  P-VALUE  INTERCEPT 846.3076.7011.030.0001 P 8.602.603.310.0026 M 0.01840.00483.830.0007 PR 4.30751.2303.500.0016\begin{array}{rllll}\text { DEPENDENT VARIABLE: } & Q & \text { R-SQUARE } & \text { F-RATIO } & \text { P-VALUEONF } \\\text { OBSERVATIONS: } 32 & 0.7984 & 36.14 & 0.0001\\\\\text { VARIABLE } & \text { PARAMETER } & \text { STANDARD } & & \\& \text { ESTIMATE } & \text { ERROR } & \text { T-RATIO } & \text { P-VALUE } \\\text { INTERCEPT } & 846.30 & 76.70 & 11.03 & 0.0001 \\\text { P } & -8.60 & 2.60 & -3.31 & 0.0026 \\\text { M } & 0.0184 & 0.0048 & 3.83 & 0.0007 \\\text { PR }& -4.3075 & 1.230 & -3.50 & 0.0016\end{array}
-Based upon the parameter estimates in the above table


A) this good is a normal good.
B) the related good is a substitute.
C) the related good is a complement.
D) a and b
E) a and c

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