You estimate a demand function and the coefficient on the advertising variable is 0.3. This suggests that previous advertising has

Question

Quizplus · Accepted Answer

The coefficient on the advertising variable in a demand function indicates how changes in advertising affect the quantity demanded. A positive coefficient, like 0.3, suggests that advertising has increased demand for the product, which is represented by a shift in the demand curve.

You Estimate a Demand Function and the Coefficient on the Advertising