Scenario 4.5:
The demand curve for grilled cheese sandwiches has been estimated using statistical techniques as follows:
log(Q) = -1.10 - 0.18 log(P) + 1.21 log(I) + 0.84 log(Ph)
where Q is the quantity of grilled cheese sandwiches
P is the price of grilled cheese sandwiches
I is income
Ph is the price of hamburgers
-See Scenario 4.5. As the price of grilled cheese sandwiches decreases, the price elasticity of demand:
A) increases.
B) does not change.
C) decreases.
D) none of the above
Correct Answer:
Verified
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