You Have Been Hired as a Consultant to Estimate the Demand

question 33

Essay

You have been hired as a consultant to estimate the demand for various brands of coffee in the market. You are provided with annual price data for two years by U.S. state and the quantities sold. You want to estimate a demand function for coffee using this data. What problems do you think you will encounter if you estimated the demand equation by OLS?

---

Definitions:

Function Prototype

A declaration of a function that specifies the function's name, return type, and parameters, used to inform the compiler about a function ahead of its definition.

Function Declarator

The syntax in programming that specifies the name, return type, and parameters of a function.

Void

A keyword indicating that a function does not return any value.

Pass By Reference

A method of passing arguments to a function where the function can modify the argument's actual value in the caller by having a reference to the original data rather than a copy.