One Problem with Using Historical Data to Estimate Demand Is

question 23

Multiple Choice

One problem with using historical data to estimate demand is the

• A) fact that people do not always buy what they need.
• B) large number of interviews that must be conducted to gather information on buyers' intentions.
• C) many variations in price necessary to measure changes in demand.
• D) likelihood that the demand curve has shifted over the time period covered by the data.
• E) need to have both price and quantity data to estimate demand.

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Definitions:

Marginal Benefit

The incremental gain in happiness or usefulness obtained through consuming an extra unit of a good or service.

Marginal Cost

Marginal cost is the cost incurred by producing one additional unit of a product or service, emphasizing the concept of variable costing.

Resource Allocation

The process of allocating resources, including capital, labor, and materials, among competing uses or projects in an efficient manner.

Production Possibilities Curve

The Production Possibilities Curve (PPC) is a model that shows the various combinations of two goods or services that an economy can produce, given its resources and technology, illustrating the concept of opportunity cost.