If Excel estimates the demand function for a product to be: Q^d = 1,500 - (5 × P), the estimated regression equation indicates that the Law of Demand does not hold.

Question

Quizplus · Accepted Answer

The estimated demand function is Q^d = 1,500 - (5 × P). The negative sign on the coefficient of price (-5) indicates that as price increases, quantity demanded decreases, which is consistent with the Law of Demand. Therefore, the statement that the Law of Demand does not hold based on this equation is false.

If Excel Estimates the Demand Function for a Product to Be