Respond to the following questions: Discuss how these variables can affect the d

Question

Respond to the following questions:

Discuss how these variables can affect the demand for your product or industry and what methods could be used to estimate the effect of these variables.

Many factors affect the demand for a product, which is a concern for management and the decision-making process. To correctly assess the demand for their products, managers must determine the effect of all relevant variables. Select a particular industry or product and define the following variables:

Inferior versus normal goods

Substitution and income effects

Derived demand

Changes in real and projected incomes

Consider this statement: Long-run cost curves are planning curves, while short-run cost curves are operating curves. Do you agree or disagree with this statement? Support your answer with an appropriate rationale. In your response, use the various cost concepts you have learned, as well as the concepts of economies and diseconomies of scale, incremental costs, and sunk costs. Provide examples and applications of these costs in your response.

Justify your choices with valid assumptions and logically driven arguments. Cite any sources using APA format.

Explanation / Answer

Inferior goods versus normal goods:Inferior goods are the goods that decreases in demand when consumer income rises, on the other hand normal goods are those good that increase the demand when consumer income rises.

Substitution effect and income:-

substitution effect is one of the effect of a change in the price of goods upon the amount of that good demanded by the consumer, other being the income effect.

Derived demant is simply a economic analysis that describe the demand placed on one good or services as a result of changes in the price of some other related goods.It is a demand for some physical or intangible thing where a market exists for both related goods and services.

Projected income:Projected income is the estimated income of future years. It is an estimate of the financial results. on the other side Real income is the real income earned by a organisation.further real income is the income of individual or nations or a organisation after adjustion inflation.It is calculated by subtracting inflation from the nominal income.

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