Multiple Choice
The management of Local Cinema has estimated the monthly demand for tickets to be ln Q = 22,328 − 0.41 ln P + 0.5 ln M − 0.33 ln A + 100 ln PDVD,where Q = quantity of tickets demanded,P = price per ticket,M = income,A = advertising outlay,and PDVD = price of a DVD 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 DVD rentals.
D) The advertising elasticity of demand for movie tickets is −0.33.
Correct Answer:
Verified
Correct Answer:
Verified
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