Shift Demand Ch. 4.2

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Shift Demand Ch. 4.2

• By Lauren Cantu

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What it is

• Refers to a shift in the demand curve
• When the quantity demanded increases, curve moves
  right (vice versa)
• Happens when ceteris paribus is dropped
• all other things (besides price) held constant

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What causes it

• Income
• Normal goods Goods that consumers demand more of
  when their income increases.
• Ex new car vs. used car
• Inferior goods when income increases, demand for
  these goods fall (you can afford something
  better)
• Ex mac cheese, generic cereals, used cars

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What causes it

• Consumer Expectations
• If price is expected to increase in the future,
  there will be an immediate increase in demand.
  (vice versa)
• Ex sales
• Population
• Ex WWII, Baby Boomers
• Consumer tastes/Advertising
• Campaigns, social trends, media influences

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What causes it

• Prices of Related Goods
• Complements two goods that are bought and used
  together
• Ex skis and ski boots
• Substitutes goods used in place of another
• Ex Snowboards and skis

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Real World

• Historically and currently, when gas prices have
  been predicted to rise, consumers will flock to
  gas stations before the prices rise (increase in
  demand)

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Video Example

• http//www.youtube.com/watch?NR1vDigiWS1YhxIfe
  aturefvwp

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Assessment True or False?

• Shift Demand refers to the shift in demand curve.
• A new car is an inferior good.
• The curve will shift right if theres an decrease
  in demand.
• Substitutes are goods used in place of another.
• Population is a factor that can cause shift.