Managerial Economics

Chapter 4

Demand Forecasting

After studying this chapter, you should be able to understand:

• Demand forecasting involves predicting the future demand for a good.
• Forecasts of demand are required not only by the established firms in the industry but also by the new entrants.
• The consumer survey method is a direct method of obtaining the relevant information relating to the future demand for the different goods.
• In direct interview method, a selected group of the users or the potential consumers are asked directly about their future plans for the good.
• In the complete enumeration method, all the consumers of the product are surveyed.
• In the sample survey method, only a few consumers are selected from the relevant market for the good.
• In the expert ...