Build-Right Concrete Products Produces Specialty Cement Used in Construction of Highways.Build-Right

Multiple Choice

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,if tax revenue per capita M) increases 5%,the estimated quantity of cement demanded will

A) increase by less than 1%.
B) increase more than 1% but less than 5%.
C) increase more than 5% but less than 10%.
D) increase more than 10%.