Fundamental concepts of managerial economics
... of Managerial Economics Question The demand curve specifies the relationship between prices and quantity demanded, holding constant the influence of all other factors. A demand function specifies all these other factors that management will often consider, including the design and packaging of products, the amount and distribution of the firm’s advertising budget, the size of the sales force, promotional expenditures, the time period of adjustment for any price changes, and taxes or subsidies.
Demand function for hybrid-electric or all-electric autos can be represented as
QD = f(P, PS, PC, Y, A, AC, N, CP, PE, TA, T)=S …Þ
Where QD = quantity demanded of (e.g., Toyota Prius or Chevy Volt)
P = price...