Question

Using a system of ranked preferences, demonstrate how the law of demand and supply are logically consistent.

Answer 1

Before answering the question, let us understand what is ranked preferences

Ranked preferences is a techniqued used by marketers to convert the stated preferences into the purchasing probability. surveys are done on people to get an understanding of their preferences and convert it into actual demand.

Suppose there are 5 items (a,b,c,d,e ) and they are ranked most preferred to least preferred. After getting the count we get a brief understanding of the demand probabilty of each item product. tus each product will get the weights like product a is 75% preffered and b is 17%, c is 6%, d is 2% and e is 0% preferred.

So this helps us determine the demand of the product item.

and according to the estimated demand the marketer order the supply production. Hence we can say that the ranked preference system actually help in maintaining a logically consistent demand supply as it helps in getting the estimated demand.