1. Business
  2. Economics
  3. suppose that you believe that the demand curve is a...

Question: suppose that you believe that the demand curve is a...

Question details

Suppose that you believe that the demand curve is a constant elasticity demand​ curve:

Q=Ape​,

..............................................

Score: 0 of 1 pt 8 of 11 (7 complete) HW Score: 54.55%, 6. Text Question 4.2 EQuestion Help Suppose that you believe that the demand curve is a constant elasticity demand curve: Q Ap where A is a positive constant and e is the constant elasticity of demand. You have some data and want to estimate a constant elasticity demand curve: where A is a positive constant, e is the constant elasticity of demand, and u is an error term. Take logarithms of both sides of this equation, and show that you get an equation that is linear in logarithmic terms (called a log-linear equation). Explain how you can estimateText Question 4.2 Question Help * where A is a positive constant, e is the constant elasticity of demand, and u is an error term Take logarithms of both sides of this equation, and show that you get an equation that is linear in logarithmic terms (called a log-linear equation). Explain how you can estimate this equation in Excel or other programs using the OLS techniques that we have discussed First the log-linear demand equation given by OA. Q=ln(A) + eln(p)+In(u). B. In(Q)=ln(A) + eln(p) + u.Text Question 4.2 Question Help You can estimate this equation in Excel using an OLS regression of the form by 0 A. using the actual values of your quantity and price data, where α is an estimate of In(A) and β is an estimate of e. O B. by converting your quantity and price data to logs, where a is an estimate of In(A) and p is an estimate of eln(p). O C. by converting your quantity and price data to logs, where a is an estimate of A and ßis an estimate of u. D. ○ E. using the actual values of your quantity and price data, where α is an estimate of A and β is an estimate of e. by converting your quantity and price data to logs, where α is an estimate of In(A) and ßis an estimate of e. Click to select your answer and then click Check Answer.

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution