Question

state and explain the objectives of demand estimation under managerial economics

Answer 1

Demand estimation under managerial economics refers to the forecasting of consumer behavior towards pricing and quantity for the future.

Objectives of Demand estimation are

(a) Pricing Policy: Demand estimation for the future helps in setting the price of product as per the market fluctuations in the future.

(b) Manufacturing policy: It helps in deciding the production of the products according to future demands.

(c) Manpower planning: when the demand is going to be high in near future then companies hire more workers to increase the production to meet the demand. So if company knows the demand from demand estimation then they can plan their manpower accordingly.

(d) Financial Planning: Demand estimation helps in deciding the finance to be needed to run the business in future.