Factors Determining Demand and Their Role in Forecasting

Several factors determine market demand, impacting how businesses plan their operations. Key determinants include price elasticity, consumer income levels, availability of substitutes, and market competition. External elements such as government policies, economic cycles, and technological shifts also influence demand. Businesses that analyze these factors effectively can create more accurate demand forecasts, leading to optimized inventory levels, efficient resource allocation, and improved profitability. Understanding these determinants is essential for businesses to stay agile in dynamic markets.

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