The demand for video recorders has been estimated to be QV = 145 - 3.2Pv +7M +0.
ID: 1098066 • Letter: T
Question
The demand for video recorders has been estimated to be QV = 145 - 3.2Pv +7M +0.95Pf -39PM, where Qv is the quantity of video recorders, PF denotes the price of video recorder film, Pm is the price of attending a movie, PV is the price of video recorders, and M is income. Based on the estimated demand equation we can conclude:
A. Video recorders are normal goods
B. Video recorder are normal goods and demand for video recorders is inelastic
C. The demand for video recorders is inelastic
D. Video recorders are normal goods and video recorder film is a complement for video recorders
Explanation / Answer
A)If income increases demand is increasing and if income decreases demand is decreasing so Video recorders are normal goods.Hence true
B) If price of video recorder is increasing then demand of video recorder is decreasing so it is inelastic.So, the statement given is true.
C)true
D)if demand of video recorder is increasing then price of of film increases which result in decrease of demand.so not complemantory. Hence false
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