In estimating the causal relationship between Sales and Price in the following determining function Salesi = ?0 + ?1Pricei + Ui, what assumption in addition to E [Ui ] = 0, justifies that the estimated coefficient on Price can be interpreted as an estimate of the causal effect of Price on Sales?

A. E [SalesiUi ] = 0
B. E [PriceiUi ] = ?0
C. E [PriceiUi ] = ?1
D. E [PriceiUi ] = 0


Answer: D

Biology & Microbiology

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