Many factors affect the demand for a product, which is a concern for management and the decision-making process. To correctly assess the demand for their products, managers must determine the effect of all relevant variables. Select a particular industry or product and define the following variables:

Inferior versus normal goods

Substitution and income effects

Derived demand

Changes in real and projected incomes

Discuss how these variables can affect the demand for your product or industry and what methods could be used to estimate the effect of these variables.

Consider this statement: Long-run cost curves are planning curves, while short-run cost curves are operating curves. Do you agree or disagree with this statement?

Support your answer with an appropriate rationale. In your response, use the various cost concepts you have learned, as well as the concepts of economies and diseconomies of scale, incremental costs, and sunk costs. Provide examples and applications of these costs in your response.