Suppose a linear demand function is estimated for good x as


Suppose a linear demand function is estimated for good x as, Qd = 100 – 4*Px + 6*Py + M. where Px = $4, Py = $2, and M =10. M is the average income of consumers, measured in thousands of dollars. Suppose the end of the recession has increased the average income of consumers by $2000 (all other factors unchanged), how will this change affect the revenue of the business? A. It will increase revenue by $8. B. It will decrease revenue by $8. C. It will increase revenue by $16. D. It will decrease revenue by $16. E. It would not affect revenue.

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Business Economics: Suppose a linear demand function is estimated for good x as
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