An economist is specifying a model for the butter market in Illinois. She likes the model that we used for Wisconsin. She is willing to assume that the determinants of supply (wage rates and hay prices) are exogenous;

also that the determinants of demand (prices of bread and olive oil) are exogenous. After reading sections 1–2 and looking at equation (10), she wants to use OLS not IVLS, and is therefore willing to assume that Pt is exogenous. What is your advice?