Professional Documents
Culture Documents
Demand Equation
Demand Equation
We formulated a demand equation for the passenger vehicle segment of the automobile
industry in India. In our training set, we considered quarterly data from September
2012 to March 2020. (59 data points in total)
Assumptions
1. Demand curve is linear
2. Effect of time value of money is negligible
3. Railway is assumed to be a close substitute for passenger vehicles
4. Price is assumed to be net realizable value per car sold (i.e. Total quarterly
turnover/number of passenger vehicle sold)
5. Fuel price is assumed to be a close compliment for passenger vehicles