Question

D Question 10 1.5 pts Assume the annual demand for Golden Delicious apples in Connecticut can be represented by the following demand equation: QG- 8-2"PG 1.2 PF 0.2 Pop 0.3"1 Where QG is the quantity demanded of Golden Delicious Apples, PG is the price of Golden Delicious Apples, PF is the price of Fuji apples, Pop is the population of Connecticut, and is the average household income in Connecticut. If the price of all apples increase by $1.00, the quantity of Golden Delicious Apples purchased will decrease by 0.8 apples O True False

Answer 1

True

This is because when price of all apples is increased by 1, the second term (-2PG) falls by 2 and the third term (1.2PF) rises by 1.2. Hence the quantity will overall change by -2 + 1.2 = -0.8. Hence a price rise of $1 in all apples will reduce the quantity of apples by 0.8.