1. You work in the corporate office of MEGA CO. with your friend Karen. In the office meeting, you suggest using an econ

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answerhappygod
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1. You work in the corporate office of MEGA CO. with your friend Karen. In the office meeting, you suggest using an econ

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1. You work in the corporate office of MEGA CO. with your friendKaren. In the office meeting, you suggest using an economic modelto analyze consumer behavior and estimate consumer demand for a newproduct that MEGA CO. is planning to release. Immediately, Karenshoots down your proposal by saying, “we cannot implement yourmodel, it is based on assumptions!”
(a) In your own words, explain why assumptions are necessarywhen building any economic model.
(b) Is there any reason to be concerned about the assumptionsthat underly an eco- nomic model? If so, please detail a fewexamples.
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