An estimated demand curve does NOT necessarily match actual data perfectly because
A)it is not possible to accurately calculate the coefficients of the curve.
B)some factors that are not measured or observed may affect the curve.
C)the random error term has too large of a range.
D)demand is unpredictable.

Question

Quizplus · Accepted Answer

An estimated demand curve is based on observed data and assumes that all factors affecting demand are accounted for. However, there may be some factors that are not directly observed or measured that affect the demand curve. These can include changes in consumer tastes or preferences, changes in the availability or quality of substitute goods, or changes in external economic factors that affect consumer behavior. These unobserved factors can lead to differences between the estimated demand curve and actual demand in the market.

An Estimated Demand Curve Does NOT Necessarily Match Actual Data