The demand for good X has been estimated to be lnQ_x^d = 100 - 2.5 lnP_X + 4 lnP_Y + lnM.The own price elasticity of good X is A)-2.5. B)4.0. C)-2.5%. D)4.0%.

Name: The demand for good X has been estimated to be lnQ x d = 100 - 2.5 lnP X + 4 lnP Y + lnM.The own price elasticity of good X is A)-2.5. B)4.0. C)-2.5%. D)4.0%.
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Question

Quizplus · Accepted Answer

The own price elasticity of good X is given by the coefficient of lnP_X, which is -2.5. Therefore, the best choice is A.

The Demand for Good X Has Been Estimated to Be