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Tag Archives: Demand and Supply

9 Criteria Of A Good Demand Forecasting Method

A prediction or estimation of future demand for the product is known as demand forecasting. Generally every business firm predicts a number of related forecasts. Since the future is uncertain, these forecasts may not be hundred percent correct. But every firm tries to obtain the forecasts as precisely as possible.A demand forecast is said to be good or efficient when the expected market demand is very near or equal to the actual market demand. This may be estimated closely if proper method of demand forecasting is chosen. However, the following …

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Methods Of Demand Forecasting For A New Product

There are many approaches we can adopt in order to exercise an accurate demand forecasting for a new product. Generally, firms apply the following approaches to forecast their products. Substitute Approach -The demand may be estimated based on the demand of its substitute existing in the market. Evolutionary Approach – Assessing the demand for a new product,  the growth and evaluation of the existing product will be taken into account Buyers or consumers view – The firm takes the review from its customers about the products. Vicarious approach (or Experts’ …

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Concept Of Consumer Sovereignty And Its Limitations

The concept of consumer sovereignty refers to the vital role which consumers play in giving shape to the Productive efforts. The producers shall asses (a) the requirements of consumers, (b) the price payable by the consumers or purchasing power and, (c) the quantities demanded by the consumers before starting production. No businessman can be successful without taking a careful note of the consumer needs, likes and dislikes etc. The term consumer sovereignty has occupied a special place in capitalism. Under capitalism, consumer acts like a king. What is to be …

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Factors Affecting Demand For Consumer Goods

The goods which can satisfy the human wants directly are called consumer goods. We demand consumer goods to satisfy the wants. The demand for consumer goods is called direct demand. The consumer goods can be classified into two types. 1. Durable consumer goods. 2. Non-durable consumer goods. Durable consumer goods: The goods which can be used for some period of time in satisfaction of wants are called durable consumer goods. For example, TV, Refrigerator, Mobile phone etc. Factors affecting demand for consumer goods (Durable Consumer Goods): The demand for durable …

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Difference Between Individual Demand Schedule And Market Demand Schedule

Individual Demand Schedule And Market Demand Schedule 2

Demand Schedule is the trend how a buyer purchases his desired commodity under a market condition. This is the responsiveness of the quantity demanded due to changes in price, income or other factors affecting demand. There are two types of demand schedules, namely, individual demand schedule and market demand schedule. Individual demand schedule: Individual demand schedule shows different quantities of a commodity purchased by a consumer at different prices in the market. This is shown in the following table: Price of commodity ‘A’ (in $) Quantity purchases (in units) 5 …

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What Are The Characteristics Of Derived Demand

What Are The Characteristics Of Derived Demand

What Is Derived Demand: Goods and services are necessary for the satisfaction of human wants. Some goods satisfy our wants directly e.g. Books, Television, food etc. The demand for these goods is direct. On the other hand some goods satisfy our wants indirectly, e.g. machinery, buildings, raw materials etc. The demand for these goods depends upon the demand for the goods which they produce. For instance the demand for textile machinery depends upon the demand for clothes. Since the demand for textile machinery is derived from the demand for clothes, …

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What Are The Different Methods Of Demand Forecasting

methods of demand forecasting

Demand forecasting helps the company to produce the required quantities of products at the right time and to arrange the various factors of production in advance. Forecasting demand accurately also helps a company to estimate the future demand for its products and plan its production. There are different methods of demand forecasting in business which are commonly known as demand forecasting techniques. There are mainly two methods of demand forecasting in business, namely – Survey method and statistical method. However, the Methods Of Demand Forecasting In Economics are presented below: …

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Factors Involved In Demand Forecasting

Generally, every business firm looks for profit maximization. It should carefully observe the market demand conditions for its products. It should also predict the changes in market demand in future. A prediction or estimation of future demand for the product is known as demand forecasting. There are so many factors involved in demand forecasting. Normally, every business organization predicts a number of related forecasts. Since the future is uncertain, these forecasts may not be hundred percent accurate. But every organization tries to obtain the forecasts as precise as possible. Demand …

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Difference Between Derived Demand And Autonomous Demand

Demand for goods is classified in many ways in Economics. On the basis of the nature of demand for goods, demand is classified into derived demand and autonomous demand. When the demand for a good depends on the demand for other goods, it is known as derived demand. Demand for cement and iron is an example for derived demand. Cement itself is not demanded by any one. Its demand is influenced and determined by the nature and extent of construction activities. Similarly, the demand for producers goods is an example …

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Cross Demand Curves For Substitutes And Complementaries

cross demand curve for complementaries

Cross demand: Cross demand is an important type or demand. It denotes the relationship between changes in the quantity demanded of commodity due to the price changes in its related goods. Substitutes and complementaries are the related goods of a commodity. Cross demand curve in the case of substitutes : In the case of substitutes the cross demand curve slopes upwards from left to right. A change in the price of one of the two commodities leads to a change in the quantity demanded of another commodity which is a …

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