Question

Studying the impct on profit and demand of increasing the price of a product for a company

-Predictive analysis

-Perspective analysis

-Descriptive analysis

-text minning

What’s the correct with explanation;

Answer 1

The correct option to this statement will be "Predictive Analysis"

Explanation

If the price of a product is increased, there might be two circumstances:

1. The demand of the product might fall down if the product is sold by multiple manufacturers at different prices. We can't comment on the profit, because if the price increases the profit might not be sacrificed as the margin of the seller might be higher or, the profit might decrease or even the seller might face losses as the demand goes down and there will be some unsold inventory or there might be a break even.

2. There might be also a condition where if the price goes up, then the demand increases. There might be some premium customers that wants to buy highly priced goods in order to maintain their status in the society. In this case, if the price of the premium goods decreases then the demand goes down.

Predictive analysis generally makes a prediction of the unknown future. It can use different techniques like Data Mining, Modelling, and different analytical techniques in order to make a prediction of the future.

As the changes in demand and profit can't be predicted accurately if the price is increased or decreased, hence predictive analysis can be a technique to forecast the future.

This technique might use past data or transactions in order to make the analysis.