A Simple Linear Demand Function May Be Stated as Q

Multiple Choice

A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income. To compute an appropriate value for b, we can use observed values for Q and P and then set -b(P/Q) equal to the:

A) income elasticity of demand.
B) cross-price elasticity of demand.
C) price elasticity of demand.
D) price elasticity of supply.