Using Excel, Best Paints Estimates the Log- Linear Weekly Demand

Multiple Choice

Using Excel, Best Paints estimates the log- linear weekly demand function for their gallon sized paints to be ln Q^d = 12.53 - (2.25 × ln P) . If Best Paints increases the price of their gallon sized paints by 5 percent, which of the following will occur?

A) The quantity will increase by 2.25 percent.
B) The quantity will increase by 11.25 percent.
C) The quantity will decrease by 2.25 percent.
D) The quantity will decrease by 11.25 percent.