estimated demand for a good is where Q is the quantity demanded of the good,P is the price of the good,M is income,and is the price of related good R.The coefficient on P
A)does not have the expected sign.
B)is negative as expected.
C)should have the same sign as the coefficient on .
D)should not be greater than one in absolute value).
E)both b and d

Question

estimated demand for a good is  where Q is the quantity demanded of the good,P is the price of the good,M is income,and  is the price of related good R.The coefficient on P
A)does not have the expected sign. 
B)is negative as expected. 
C)should have the same sign as the coefficient on . 
D)should not be greater than one in absolute value). 
E)both b and d

Quizplus · Accepted Answer

The coefficient on P should have a negative sign as expected, as an increase in price would lead to a decrease in quantity demanded according to the law of demand. The other answer choices are not necessarily true as there is no information given about the sign of the coefficient on related good R or the magnitude of the coefficient on P. Therefore, option B is the best choice as it is the only one that is certain based on economic theory.

Estimated Demand for a Good Is Where Q Is