need help with question:

the table demand_monopoly includes price and quantity observations for a firm.

It also includes data on mcShifter, which is a variable affecting the marginal cost of producing a product.

What assumptions are required in order to use mcShifter as an instrument to estimate the price elasticity of demand using instrumental variables?

(In terms of the standard supply/demand diagram: How does a change in the production costs likely affect the diagram?)

demand_monopoly (1) demand_monopoly (1)