Download Factors of Demand - Flushing Community Schools

Factors of Demand
Change in Quantity
Demanded
• Movement ALONG a demand
curve showing a change
demanded because of a
CHANGE OF PRICE
Change in Demand
• Movement OF A demand curve
due to people wanting different
quantities at all prices
Demand Curve
Movement
• Increased demand will always shift the
curve to the right
• Decreased demand will always shift the
curve to the left.
Determinants
• Consumer Income
• Consumer Tastes
• Price of Substitutes
• Price of Complements
• Change in Expectations
• Number of Consumers
Consumer Income
• Income up-- people can afford
more goods so demand goes up
(Shift Right)
• Income down-- people can’t
afford as much so demand goes
down (Shift Left)
Consumer Tastes
• New product or fad demand
will go up (Shift Right)
• Fad wears out or people tire of
a product demand will go down
(Shift Left)
Price of Substitutes
• Price of substitute down demand
for original product decreases
(Shift Left)
• Price of substitute up demand for
original product increases (Shift
Right)
Price of Complements
• Price of complement down
demand for other complement
up (Shift Right)
• Price of complement up
demand for other complement
down (Shift Left)
Change in Expectations
• New innovations or products
coming into an industry may
decrease demand (Shift Left)
• May increase demand in certain
cases of weather (Shift Right)
Number of Consumers
• More people enter in demand
goes up (Shift Right)
• People leave demand goes down
(Shift Left)