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Refer to the Following:
the Estimated Demand for a Good Q^=4,80016P0.65M1.5PR\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }

Question 63

Multiple Choice

Refer to the following:
The estimated demand for a good is

Q^=4,80016P0.65M1.5PR\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }
where Q is the quantity demanded of the good, P is the price of the good, M is income, and
PRP _ { R } is the price of related good R.
-If income decreases by $2,000, all else constant, quantity demanded will ________ by _________ units.


A) increase; 1.30 units
B) decrease; 6.5 units
C) increase; 1,300 units
D) decrease; 65 units

Correct Answer:

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