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Demand Analysis

Demand Analysis

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Published by: sumitkgupta on Feb 07, 2012
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07/03/2015

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Demand Analysis

By: Neelam Tandon

Chapter Outline ‡ ‡ ‡ ‡ ‡ ‡ ‡ Introduction Concept of Demand Types of Demand Demand Function and Demand Curve Demand Elasticities Demand Forecasting Summary .

the income of the consumers. the taste and preference patterns of consumers. the expected price of the product in future periods and the number of consumers in the market ( for market demand). ‡ The six principle variables that influence the quantity demanded of a good or service are: ‡ The price of the good or service. . the price of related goods and services.Demand ‡ The amount of a good or service consumers are able and willing to purchase during a given period of time is called quantity demanded.

Demand Components ‡ ‡ ‡ ‡ ‡ Desire to acquire Willingness to Pay Ability to Pay Time Price .

we must explain how changing that one variable by itself influences Qd. It requires all other variables be held constant. N) ‡ To know the individual effect that any one of these six variables has on Qd. . Pr.Generalized demand function ‡ Qd = f (P. Pe. M. T.

employees . soap. . raw materials are all producer goods.Types of Demand Consumer Good Consumed by the consumer for final consumption Direct Demand Tooth paste. Producer Good Used by the producer for further production process Derived demand Plant and machine. car for self consumption are all consumer goods. shampoo. equipments.

Perishable and Durable Goods Perishable Goods Have a short shell life Consumed only once Depend on current demand Durable Goods Have a long shell life Can be consumed over a period of time Partly to satisfy new demand and partly to replace old product or service hence have uncertainty of preponement or post-ponement. Normally less expensive Normally more expensive .

All eatables have autonomous demand ‡ Derived demand goods are producer goods .Autonomous and Derived demand ‡ Autonomous goods have independent demand . . Degree of dependence varies from one good to another.even money has derived demand.

This depends on market size I. . ‡ Firm is always concerned about market demand rather than individual demand but for a consumer his demand is of prime importance.e. number of consumers in the market.Individual demand and market demand ‡ Summation of individual demand is market demand .

Firm and Industry demand ‡ Demand by one firm is firm¶s demand and demand by the whole industry is industry¶s demand. ‡ Example: Demand by TATA steel of raw materials is firm¶s demand but demand by entire steel industry of India is industry demand. Industry demand is a wider concept comprising of firm¶s demand. .

geographical area etc results in the market segment of the good or service launched by the same company. competitors . profit margin.Market Segment Demand and Total Market Demand ‡ Demand on the basis of number of consumers. these are known as market segments but Nirula¶s as such has total market demand in Delhi. pricing. . distribution network. Example : Nirula¶s has outlets in each and every corner of Delhi .

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