In Estimating Demand Functions, What Is The Most Important Thing to Remember?

Estimating Demand Functions
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Estimating demand functions
In business, knowing what to expect from sales, means estimating the demand of the product. Using demand estimation the business can estimate how much to produce to meet the market demand (Provost & Fawcett, 2013). When making an important decision on the quantity to produce, the demand estimation approximates what is expected to be sold in the market (Provost & Fawcett, 2013).
It is important to remember that demand estimation is confined to a specific period like a month or a year, there is no accurate measurement, and instead demand estimation is based on assumptions (Albright, Winston & Zappe, 2010). When making important decisions, it is important to consider if the data used for estimating the demand contain varying elasticities constant elasticities (Albright, Winston & Zappe, 2010).
When estimating the demand by of the product, other factors like the market growth n...