Demand curve formulation
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A company wants to prepare a demand curve for its product that it is selling. How would it get the information to prepare the schedule? How could a company prepare a demand curve for a new product that has not been seen by the public?
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How to develop a demand curve that has not been seen by the public
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A demand curve reflects the fact that people can purchase more of an item at lower prices. Thus the curve for an industry is downward sloping, with price on the y axis and quantity on the x.
If the company's product is a substitute for something else, it faces competition. In this case we have to distinguish between the industry demand and the demand for the output of an individual firm, which are quite different. A perfectly competitive firm has a horizontal demand curve. But in a ...
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