## Demand Estimation

Demand estimation is a method involving estimations of the demand amount of goods or services. The estimations are for a defined timeline and help with pricing. The demand estimations can be computed from a regression equation. Demand estimation provides the market operators with statistical information on the possible future behavior of the market.

Computations of Elasticity

If the maker of a leading brand of low-calorie microwavable food has a demand function of QD = - 5200 � 42P + 20C + 5.2(I) + 0.20(A) + 0.25(M)
(2) (17.5) (6.2) (2.5) (0.09) (0.21) R2 = 0.55 n = 26 F = 4.88  where (P) is price of the product,  (A) is the advertising expenditure, and (C) is the price of leading competitor�s product. (I) is the per capita income in the area, and (M) the number of microwave ovens sold in the area. Assuming the following values for the independent variables:
QD = Quantity demanded
P (in cents) = Price of the product = 500
C (in cents) = Price of leading competitor�s product = 600... 