(i) Collection of data (ii) Estimating the parameters of the model (iii) Mathematical specification of the relationship among the variables (iv) Using the estimates to arrive at the estimates of variables. (v) Identification of variables
Market Structure No. of firms and degree of product differentiation Control over price (1) Perfect competition Large number of firms with homogeneous products None (2) Monopolistic Competition Many firms with real or perceived product differentiation Some (3) Oligopoly Little or no product differentiation and many firms Some (4) Monopoly Single […]
(Where Ed = elasticity of demand, Q = Quantity, P = Price and Δ = represents change)