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Q. Can you explain about Counterfactual?
The ‘base case' or counterfactual is a statement of what could have happened without policy intervention, or if the policy intervention had taken a different but specified form. Any evaluation of a policy's effects could be made relative to what would otherwise have happened. Generally it is not enough to describe the starting position or ‘baseline' since this is likely to change over time.
Example of a cost function
what will be the effect on price and quantity when supply and demand changes in different directions but same magnitude?
Ask question # how do you formulate a demand and supply equations when you a table of prices, quantity demanded and supplied?
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