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Chapter: Civil : Engineering Economics and Cost analysis : Demand and Schedule

The Nature of the Demand or the Various Demand Distinctions

ii. Demand for producer's goods and consumer's goods iii. Demand for durable goods non durable goods iv.Industry demand and firm or company demand v. Total demand and market segment demand

THE NATURE OF THE DEMAND OR THE VARIOUS DEMAND DISTINCTIONS

 

i. Derived demand and autonomous: Those inputs or commodities which are demanded to help in further production of commodities are said to have in further production of commodities are said to have derived demand. For example, raw material, labour machines etc are demanded not because the y serve only direct consumption need o f the purchaser but because the y are needed for the production of goods having direct demand (say , food , scooter . building ,etc)

 

ii. Demand for producer's goods and consumer's goods: The difference in these two types of demand is that consumer's goods are needed for producing ot her goods (consumer's goods or further producer's goods)

 

iii. Demand for durable goods non durable goods: Durable goods whether producer's durable or consumer's durable are the ones which canbe stored and whose replacement can be postponed. O n the other hand, the non durables are needed as a routine and their demand is their fore made largely to meet day-to- day needs.

 

iv.Industry demand a nd firm or company demand: The term company demand denotes demand for a particular product of a particular firm Industry demand refers to the total demand for the product of a particular industry.


Total demand and market segment demand: Demand for the market segments is to be studied b y breaking the total demand into different segments like geo graphical areas , sub - products, product use, distribution channels, size of customer groups, sensitivity to price etc.

The market segments are so demarcated that each segment has its own ho mogenous demand characteristics. F urther, each o f these market segments must differ significantly in terms of delivered prices, net profit margins, and number of substitute s, co mpetition, seasonal, patterns and cyclical sensitivity.

 

vi. Short run de mand and long run de mand: Short run demand refers to demand with its immediate reactions to price changes, Income fluctuations etc. W hereas long run demand is that which will ultimately exist as a result demand of the change in pricing promotion or products improvement , after enough time is allowed to lat the market adjust itself to the new situation.


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Civil : Engineering Economics and Cost analysis : Demand and Schedule : The Nature of the Demand or the Various Demand Distinctions |


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