<p>A demand curve relates Quantity demanded to Price. If ice creams are always $2 then your data won't help you estimate a demand curve. Try offering some daily specials to create some price variation. No, people won't respond exactly the same way to a "discounted regular price" as they will to a lower everyday price, but still you will begin to gather the information you need tobuild a demand curve. And yes, you will need to offer higher prices, as well.</p>

CC BY-SA 3.0
2017-06-29T12:59:44.327Z
2017-06-29T12:59:44.327Z
Ed Rigdon
<p>I think You will have to account for various factors other than price. What is your purpose in estimating the demand curve? </p>

<p>This <a href="http://www.econ.jku.at/members/WinterEbmer/files/Teaching/managerial/ws14-15/estimating.pdf" rel="nofollow">link</a> will give you a good explanation on how to estimate demand curves if you are looking for simple exposition - assuming that sales and other factors have linear relationship. </p>

<p>If you are good at econometrics, you may want to consider simultaneous equations models. It is likely that your single equation model will suffer from simultaneity and omitted variable bias along with identification problems. </p>

CC BY-SA 3.0
2016-01-17T18:41:30.067Z
2016-01-17T18:41:30.067Z
london
<p>Suppose I have a small business that sell ice creams.
An Icecream cost 2$, and every day I have different values of sales.</p>

<pre><code>Day 1: 50 sales
Day 2: 70 sales
Day 3: 30 sales
Day 4: 50 sales
</code></pre>

<p><strong>How to I estimate the demand curve?</strong></p>

<ul>
<li>Should I change every day the price of the icecream and see how many sales I get? (the variation could be caused by many other factors)</li>
<li>Should I do a linear regression on the sales data?</li>
</ul>

<supply-and-demand><elasticity><pricing><price-discrimination>
How to estimate empirically a demand curve
sparkle
# How to estimate empirically a demand curve

(Asked by: username_0 on 2016-01-17)

Suppose I have a small business that sell ice creams.
An Icecream cost 2$, and every day I have different values of sales.
Day 1: 50 sales
Day 2: 70 sales
Day 3: 30 sales
Day 4: 50 sales

How to I estimate the demand curve?

Should I change every day the price of the icecream and see how many sales I get? (the variation could be caused by many other factors)
Should I do a linear regression on the sales data?

**Tags:** supply-and-demand, elasticity, pricing, price-discrimination


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## 2 answers

### Answer by username_1 on 2017-06-29. Score: 2 | Accepted answer

A demand curve relates Quantity demanded to Price. If ice creams are always $2 then your data won't help you estimate a demand curve. Try offering some daily specials to create some price variation. No, people won't respond exactly the same way to a "discounted regular price" as they will to a lower everyday price, but still you will begin to gather the information you need tobuild a demand curve. And yes, you will need to offer higher prices, as well.


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### Answer by username_2 on 2016-01-17. Score: 2

I think You will have to account for various factors other than price. What is your purpose in estimating the demand curve?

This [link](http://www.econ.jku.at/members/WinterEbmer/files/Teaching/managerial/ws14-15/estimating.pdf) will give you a good explanation on how to estimate demand curves if you are looking for simple exposition - assuming that sales and other factors have linear relationship.

If you are good at econometrics, you may want to consider simultaneous equations models. It is likely that your single equation model will suffer from simultaneity and omitted variable bias along with identification problems.


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