Consider the following equilibrium model for the supply and demand for a product. Qi = Bo + B₁ Pi + B₂Yi + ui (1) P₁ = ao + a1Qi + ei (2) where Qi is the quantity demanded and supplied in equilibrium, Pi is the equilibrium price, Y; is income, ui and e; are random error terms. Explain why Equation (1) cannot be consistently estimated by the OLS method. 1 A▾ BUI P Fr $
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