A team of analysts at Amazon is researching the viability of producing a smart watch. How might they estimate potential demand for their smart watch?
a. Consider the four-step process that many companies follow to estimate the market demand curve for their product. Place the steps in order, with the first step in the highest position and the last step in the lowest position.
survey customers
plot the demand curve
scale up the quantities demanded by the survey respondents
add up the total quantity demanded by the customers at each price point
b. Select two factors that the analysts want to keep in mind to create the most accurate demand estimates.
cost of inputs to production
information about climate change
existing competition in the market
consumer demographic information

When the analysts go into the market to research, they should start by surveying a sample of customers. They can then add up the quantity that was demanded by the customers at each price point to find out the total demand.

They should then scale up these results to see what the total market demand is. Then finally they should then use the scaled up data to construct a demand curve.

b. Two important factors

existing competition in the market - when creating demand estimates the analysts should keep in mind that they may have competition who are already selling their product. Their demand analysis should take into account factors like the people who have already bought the product and might no longer needing it or the price that the other competitors are selling at.
consumer demographic information - demand also depends on demographic factors such as age and economic class. Some products are not very well used by the older generation such as smart watches so the researchers need to ensure that they have the right age groups. The watch might also cost an amount that some people cannot afford so this must be taken into account as well.