Historical data on prices and quantities sold do not provide the basis for drawing an accurate demand curve because
A)reporters who gather these data are often wrong.
B)factors other than price may change over time.
C)they do not include measures of price close to the quantity axis.
D)they sometimes tend to be clustered around one point.

Question

Quizplus · Accepted Answer

Historical data on prices and quantities sold may not accurately reflect the true relationship between price and quantity demanded because other variables that affect demand, such as consumer preferences, income levels, and availability of substitutes, may change over time. Therefore, historical data cannot be used to draw a representative demand curve.

Historical Data on Prices and Quantities Sold Do Not Provide