Replacement demand, Microeconomics

The total demand consists of:

1. New owner demand and

2.A replacement demand

The replacement demand tends to grow with the in the total stock with the consumers. Once a person gets used to a thing she is unlikely to give it up at some future date. This makes replacement demand regular and predictable. For certain established products life expectancy tables are been prepared in developed countries in order to estimate the average replacement rates. When purchasing power increases the scrap page tens to increase. The total demand it symbolically stated as D = N + R where N is new owner demand and R is the replacement demand. Each of these independent variable may be forecasted separately. The purchasing power the number of families and some other factors depending on the product concerned set an upper limit to the maximum or the optimum ownership level. It is the level towards which the actual volume of consume stock tends to gravitate. The difference between optimum and the actual stock shows the growth potential of the demand for durable goods.

Posted Date: 3/30/2013 1:53:13 AM | Location : United States







Related Discussions:- Replacement demand, Assignment Help, Ask Question on Replacement demand, Get Answer, Expert's Help, Replacement demand Discussions

Write discussion on Replacement demand
Your posts are moderated
Related Questions
Write an objective analysis paper on the economics of outsourcing and insourcing production by businesses. Please make sure you have a thesis (a main point that you are making) and

1.  How does the marginal social benefit curve of a common resource compare to the marginal social benefit curve of positive externality from a mixed good? Highlight the difference

discuss the central economic problem facing survivor group

Allocative efficiency criteria are satisfied by the competitive model.  Because P = MC, in each market in the economy there is no over- or under- allocation of resources in this ec

Q. What do you meant by Relative Poverty? Relative Poverty: A measure of poverty based on an individual or family's relative income compared to overall average level of income

Create a Document that displays information about cars. First, create a select with an id="make". It will not have any makes in the options until the page finishing loading. When t

Maurice has the following utility function: U (X; Y ) = 20X + 80Y ?? X2 ?? 2Y 2 where X is his consumption of CDs, with a price of $1, and Y is his consumption of movie videos, wit

When does deadweight loss occur to society? Applying consumer and producer surplus the efficiency costs of a tax: A tax causes a deadweight loss to society, since less the g

Assuming the Heckscher-Ohlin model is true. Suppose the Cuba and Russia sign a free trade agreement. Furthermore, assume the Cuba and Russia only produce cigars and vodka. Russia h

Document Design It refers to the overall "look" and design rather than the content of a document. Specific elements such as white space, limited paragraph indentations, length