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# Consider the following multiplicative demand function where QD = quantity demanded, P = selling price, and Y = disposable income: QD = 1.6 P-1.2 The...

Consider the following multiplicative demand function where QD = quantity demanded, P = selling price, and Y = disposable income:
QD = 1.6 P-1.5 Y.2
The exponent of Y (i.e., .2) indicates that (all other things being held constant):
a   for a one percent increase in disposable income, quantity demanded would increase by .2 percent
b   for a one unit increase in disposable income, quantity demanded would increase by .2 units
c   for a one percent increase in disposable income quantity demanded would increase by .2 units
d   for a one unit increase in disposable income, quantity demanded would increase by .2 percent
e   none of the above

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