A PROJECT REPORT ON LAW OF DEMAND THEORY IMPACT ON CUSTOMERS BUYING ATTITUDE WITH REFERECE COOKING OIL
Author(s):
Dr. S.NAGARAJU
Keywords:
Abstract
Recently, we have observed extraordinary oil price increases from 2021 to 2022 and during these relatively short periods, the oil prices became a double. We investigate what cause these extreme events in term of the supply and demand based price decision mechanism. Demand factors in the oil markets are categorized into the real demand and strategic demand. If there is inflation affect on economy, the price of the entire FMCG products price increase eventually oil price also. In contrast, if the economy is booming, companies may increase their investment, which will increase the oil demand and oil price. On the other hand, if the Mideast political environment is unstable, people may expect the oil price increase soon. Based on this rational expectation, some people may buy the oil more than their real demand in a strategic aspect, which leads to oil price risings. Meanwhile, the OPEC production and Shale oil development have been interesting supply factors in the recent oil markets. To find out which factors are more significantly influence the oil price falls, lag-differenced time-series regression models with various input variables (supply and demand factor) were evaluated in the aspect of out-of-sample forecasting performances. In particular, monthly spot prices of WTI, Brent, and Dubai were implemented due to the availability of input variables. Impacts of supply and demand factors between two oil price falling periods were evaluated and compared. The law of demand is a fundamental principle of economics that states that at a higher price consumers will demand a lower quantity of a good. Demand is derived from the law of diminishing marginal utility, the fact that consumers use economic goods to satisfy their most urgent needs first.
Article Details
Unique Paper ID: 156305

Publication Volume & Issue: Volume 9, Issue 3

Page(s): 226 - 230
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