Using the data in the table and the least squares method, the demand relationship is:
? = 8.08 − .49? + .81?.
? = ? − ?? + ?𝐼
The Statistical Approach to Demand Estimation

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Price and quantity data can
be used to determine the
form of a demand
relationship.
But the same data could
describe a single demand
curve
D
or three demand
curves
d
1,
d
2, and
d
3 that
shift over time.
ESTIMATING DEMAND
F
IGURE
4.19