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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….?

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shifts in the demand curve

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
Change in Demand or Change in Quantity Demanded
  • What affects demand?
    • Price or….?
  • Demand Shifters/Non-price determinants
    • Number of buyers
    • Tastes
    • Income
    • Expectations
    • Price of related goods
change in quantity demanded
Change in Quantity Demanded
  • 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
Change in Demand
  • 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
summary
Summary
  • Use your notes and knowledge to complete the classwork.
demand shifter factors
Demand Shifter Factors
  • What affects quantity demanded?
    • Number of Buyers
    • Tastes
    • Income
      • Normal good
      • Inferior good
    • Expectations of Buyers
    • Price of Related Goods
      • Substitutes
      • Complements
demand shifter factors income
Demand Shifter Factors: Income
  • 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
demand shifter factors prices of related goods
Demand Shifter Factors: Prices of Related Goods
  • 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.
handouts
Handouts
  • Demand Shifter Factors with Real-World Examples
  • Demand Homework #2
    • Complete through #7
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