A simple linear demand function may be stated as Q = a – bP + cI where

A simple linear demand function may be stated as Q = a – bP + cI where Q is quantity demanded, P is the product price, and I is consumer income.

To compute an appropriate value for c, we can use observed values for Q and I and then set the estimated income elasticity of demand equal to: A) c(I/Q)
B) c(Q/I)
C) -b(I/Q)
D) Q/(cI)

ANSWER

A