Causes to Changes in Demand

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Chapter 4

• Section 2
• Causes to Changes in Demand

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Movement Along the D Curve

• Price makes changes on the Demand Curve
• r change in
• Ceteris paribus
• All other things held constant.

B
30
A
20
100
80
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Determinants of Demand

• Anything that is not Price causes a change in the
  movement of the demand curve.

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Increase Decrease
P
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1) Income

• Income affects demand
• Normal Goods
• Goods that consumers demand more of when their
  income raises
• Buy more at every price level
• Example Income from 50 to 75 a day
• Inferior goods
• Goods you would buy less of or something better
  if you income went up.

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2) Consumer Expectations

• Future Event will change demand
• Holidays
• Seasons
• Political Events
• Weather
• Changes in Income
• Example Car Salesman
• Tells you a rise in price next week. Demand?
• Draw Demand Curve
• Tells you a sale next week. Demand?
• Draw Demand Curve

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3) Population

• More people more people needing fed and housed.
• Example Baby Boomers
• After World War II
• Baby Clothes, Baby Food, etc
• Includes Demographics
• Income Levels
• Jobs
• Locations
• Target Market target consumer

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4) Consumer Tastes and Advertising

• What causes tastes to change?
• Bell bottoms?
• Advertising
• Plays a big role in many trends
• Consumer Tastes Popularity
• Advertising Awareness

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5) Price of Related Products

• Substitutes
• Take the place
• Milk (Product A)
• Pop (Product B) Sub
• Product A
• P h D i
• Causing
• Product B
• D h

• Complements
• Go Along With
• Milk
• Cookies
• Product A
• P h
• Causing
• D i

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