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# Shifts in the Demand Curve - PowerPoint PPT Presentation

Shifts in the Demand Curve. Objectives: Explain the difference between change in quantity demanded and change in demand Identify demand shifter variables that cause changes in demand. Change in Demand or Change in Quantity Demanded . What affects demand? Price or….?

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### Shifts in the Demand Curve

Objectives:

Explain the difference between change in quantity demanded and change in demand

Identify demand shifter variables that cause changes in demand

Change in Demand or Change in Quantity Demanded

• What affects demand?

• Price or….?

• Demand Shifters/Non-price determinants

• Tastes

• Income

• Expectations

• Price of related goods

• Change in quantity demanded

• Movement between points along a demand curve

• Results solely from a change in price

• Based on assumption that all other demand shifter factors remain constant

• Change in demand

• Increase (rightward shift) or decrease (leftward shift) in the demand curve

• Result of change in one of the five demand shifter factors

• Use your notes and knowledge to complete the classwork.

• What affects quantity demanded?

• Tastes

• Income

• Normal good

• Inferior good

• Price of Related Goods

• Substitutes

• Complements

• Normal Good

• Any good for which there is a direct relationship between changes in income and its demand curve

• Income increases  demand increases

• Income decreases  demand decreases

• Inferior Good

• Any good for which there is an inverse relationship between changes in income and its demand curve

• Substitutes

• Goods that compete for consumer purchases

• Pepsi-Cola & Coca-Cola

• Direct relationship between a price change for one good and the demand for its “competitor” good

• Complements

• Goods that consumers purchase together with another good

• Printers and ink cartridges

• Inverse relationship between a price change for one good and the demand for its “go together” good.

• Demand Shifter Factors with Real-World Examples

• Demand Homework #2

• Complete through #7