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Explain the steps for demand estimation

Explain the steps for demand estimation.

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Steps in Demand Estimation:

• Identification of independent variables like price, population, price of substitutes, per capita income and advertisement expenditure.
• Collection of data upon the variables by past records and publications of different agencies.
• Development a mathematical model or equation which indicates the relationship in between dependant and independent variables.
• Estimation of the parameters of the model. It is to estimate the unknown values of the parameters of the model.
• Development of estimates based upon the model.

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