# Constant Rate Of Change

Presume it is believed by an analyst that there is a constant rate of change in sales from one quarter to another. This entails that demand or sales enhance by the same volume in each quarter.

This enhances in demand for one quarter can be procured by estimating the parameters of the following deterioration function which is,

Yt = Yo + bt

Yt refers to demand or sales proceeds in one quarter for which forecast is to be calculated. Yo is the parameter depicting sales proceeds in any quarter 0, which means it gauges the cut off of the trend line on the Y axis.

The parameter b is a constant rate of change and depicts the incline of the trend line. With the support of computing devices the deterioration function can be approximated by using normal least square method.

__(D)__ __Constant Percentage Rate of
Change__

Now it is being assumed by an analyst that sales enhances by a constant percentage every quarter. The function articulating such an association is as follows:

Yt = Yo (1+g)^t …..Equation (1)

Where g is a constant rate of growth or variation. The parameters of this function cannot be evaluated by using normal least square method. But if we convert the above function into logarithmic way, we can use normal least squares method to evaluate the parameters.

Therefore, the conversion of the above function is procured as follows:

Log Yt = Log Yo + t Log (1 + g)

Presenting Xt for log Yt, Xo for log Yo and b for log (1+g), we get the following and this is to understand and present in a simple manner.

Xt = Xo + bt

It is to be noted that sales proceeds data Yo and Yt have been converted into logarithmic notations, t has not been converted.

__Econometric Method of Demand Forecasting__

- A significant method of forecasting technique used by the managerial economist is the econometric structure.

- Econometrics is use of statistical methods and economic theory to evaluate the causal association among economic variables is accomplished.

- Then through the use of statistical methods approximates of parameters are made. With the support of these parameters forecasting of demand is accomplished.

- Econometric technique has a number of significant advantages over time series scrutiny, survey method, skilled persons’ opinion or sales force electing method and finally barometric modes.

- The significant advantage of econometric method is that it is not only enables us to forecast an economic phenomenon but also describes it. That is it inaugurates informal association among economic variables.

- As management is able to influence some of the self-governing variables in a demand function such as price of commodity, advertising outlay, variation in the commodity design, econometric mode also supporting the management the contact of variation in its marketing policies.

- It is therefore, may be a single functioned model or a multiple functioned model.

**Online Live Tutor Econometric Method of Demand Forecasting:**

We have the best tutors in Economics in the industry. Our tutors can break down a complex Econometric Method of Demand Forecasting problem into its sub parts and explain to you in detail how each step is performed. This approach of breaking down a problem has been appreciated by majority of our students for learning Econometric Method of Demand Forecasting concepts. You will get one-to-one personalized attention through our online tutoring which will make learning fun and easy. Our tutors are highly qualified and hold advanced degrees. Please do send us a request for Econometric Method of Demand Forecasting tutoring and experience the quality yourself.

**Online Constant Rate of Change Help: **

If you are stuck with an Constant Rate of Change Homework problem and need help, we have excellent tutors who can provide you with Homework Help. Our tutors who provide Constant Rate of Change help are highly qualified. Our tutors have many years of industry experience and have had years of experience providing Constant Rate of Change Homework Help. Please do send us the Constant Rate of Change problems on which you need help and we will forward then to our tutors for review.

**Other topics under Demand Analysis and Theory of Consumer Choice:**

- Consumer's Behavior Cardinal Utility Analysis
- Consumer's Equilibrium - Doctrine of Equi-Marginal Utility
- Chief Property of Indifference Curves
- Demand Estimation
- Demand Forecasting
- Demand Indifference Curve Analysis
- Exposed Inclination Theory of Demand
- Income Effect and Income Consumption Curve
- Income Elasticity of Demand
- Weak Axiom of Exposed Inclination