estimated demand for a good is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.The coefficient on P
A)violates the law of demand.
B)is negative as dictated by the law of demand.
C)should not be greater than one (in absolute value).
D)should have the same sign as the coefficient on $P _ { R }$ .
E)both c and d

Question

Quizplus · Accepted Answer

The coefficient on P is negative, which is in line with the law of demand that states that as price increases, quantity demanded decreases.

Estimated Demand for a Good Is Q^=4,800−16P−0.65M−1.5PR\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }Q^​=4,800−16P−0.65M−1.5PR​

Estimated Demand for a Good Is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$