Multiple Choice
The management of Local Cinema has estimated the monthly demand for tickets to be lnQ = 22,328 - 0.41 lnP + 0.5 lnM - 0.33 lnA + 100 lnPvcr, where Q = quantity of tickets demanded, P = price per ticket, M = income, A = advertising outlay, and Pvcr = price of a VCR tape rental.It is known that P = $5.50, M = $9,000, A = $900, and Pvcr = $3.00.Based on the information given, which of the following statements is false?
A) Advertising decreases the demand for movie tickets.
B) Movies are normal goods.
C) Movies are complements for VCR tapes.
D) The advertising elasticity of demand for movie tickets is -0.33.
Correct Answer:
Verified
Correct Answer:
Verified
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