Consider the following linear demand function where QD = quantity demanded,P = selling price,and Y = disposable income: QD = −36 −2.1P + .24Y
The coefficient of P indicates that (all other things being held constant) :
A) for a one percent increase in price,quantity demanded would decline by 2.1 percent
B) for a one unit increase in price,quantity demanded would decline by 2.1 units
C) for a one percent increase in price,quantity demanded would decline by 2.1 units
D) for a one unit increase in price,quantity demanded would decline by 2.1 percent
E) none of the above
Correct Answer:
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