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CONSIDER THE FOLLOWING LINEAR DEMAND FUNCTION WHERE Q D = QUANTITY DEMANDED; P = SELLING PRICE.

CONSIDER THE FOLLOWING LINEAR DEMAND FUNCTION WHERE Q D = QUANTITY DEMANDED; P = SELLING PRICE.

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Consider the following linear demand function where Q D = quantity demanded; P =selling price.QD = 60 – 4PThe price elasticity of demand associated with P=10−4.00−2.00–1.33–0.67Question 4A simple linear regression function, Y = 20 − 0.05X, where Y denotes the sales of gas (x1,000 gallons) and X denotes the gas price ($ per gallon). We can estimate that onedollar increases in gas price will decrease the sales by5,000 gallons50 gallons0.05 gallons15,000 gallonsQuestion 5In general, which of the following methods is the most costly and risky in estimatingmarket demand?Consumer surveysMarket experimentsStatistical demand analysisConsumer focus groupEconomic profit is defined as the difference between total revenue andQuestion 6Economic profit is defined as the difference between total revenue andexplicit cost.total economic cost.implicit cost.shareholder wealth.Question 7If the current price elasticity of demand for product X is −1.2, a 10% price cut will resultin12% decrease of quantity demanded.0.8% increase of total revenue.12% increase of total revenue.0.8% increase of quantity demanded.Which of the following is NOT the factor affecting how elastic a demand is?Time of adjustmentAvailability of close substitutesShare in budgetPrice of the goodQuestion 9

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