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Exhibit 16

Question 29

Multiple Choice

Exhibit 16.5.The following data shows the demand for an airline ticket dependent on the price of this ticket. Exhibit 16.5.The following data shows the demand for an airline ticket dependent on the price of this ticket. For the assumed cubic and log-log regression models,Demand = β<sub>0</sub> + β<sub>1</sub>Price + β<sub>2</sub>Price<sup>2</sup> + β<sub>3</sub>Price<sup>3</sup> + ε and ln(Demand) = β<sub>0</sub> + β<sub>1</sub>ln(Price) + ε,the following regression results are available: Refer to Exhibit 16.5.What is the price elasticity of the demand found by the log-log model? A) 26.3660 B) -3.2577 C) 0.9852 D) 0.2071 For the assumed cubic and log-log regression models,Demand = β0 + β1Price + β2Price2 + β3Price3 + ε and ln(Demand) = β0 + β1ln(Price) + ε,the following regression results are available: Exhibit 16.5.The following data shows the demand for an airline ticket dependent on the price of this ticket. For the assumed cubic and log-log regression models,Demand = β<sub>0</sub> + β<sub>1</sub>Price + β<sub>2</sub>Price<sup>2</sup> + β<sub>3</sub>Price<sup>3</sup> + ε and ln(Demand) = β<sub>0</sub> + β<sub>1</sub>ln(Price) + ε,the following regression results are available: Refer to Exhibit 16.5.What is the price elasticity of the demand found by the log-log model? A) 26.3660 B) -3.2577 C) 0.9852 D) 0.2071 Refer to Exhibit 16.5.What is the price elasticity of the demand found by the log-log model?


A) 26.3660
B) -3.2577
C) 0.9852
D) 0.2071

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