Determinants+of+Demand

The Determinants of Demand are factors that one would consider when trying to plot out a certain demand curve. The Determinants of Demand are as follows:

Tastes and Preferences Number of Buyers Incomes -Normal (Superior) & Inferior Goods Prices of Related Goods -Substitutes & Complements -Unrelated Goods Expectations

For example, consider the number of buyers as you would consider the population of a country. As more buyers enter a specific market (or the population increases), at every possible price, the buyers will buy more (there are more people to provide for, so buyers will purchase mroe product).

If any of these factors influences consumers **positively**, making them more likely to buy the good, then one would witness a shift in the demand curve to the upper right. On the flip side, if any of the above factors influeces consumers **negatively**, making them less likely to buy the good, then one would witness a shift in the demand curve to the lower left. Graph: As shown above, a negative influence on one of the factors would show a shift to curve D(L) from D(O).

media type="youtube" key="t5y3-7mSHI0" height="344" width="425" This video shows a comedy about Fads, which are basically short increases in consumer expectations followed by quick decreases in consumer expectations.

Outside Links: http://www.theshortrun.com/classroom/glossary/macro/demand.html http://www.fao.org/docrep/w4388e/w4388e0t.htm http://en.wikipedia.org/wiki/Demand -see Parameters

Quiz: Which of these would cause a shift in the demand curve to the right of peanut butter.

A. An increase in the price of Jelly B. New research that says Peanut Butter is good for the heart C. 50% of the world is infected with a bug that makes them allergic to peanut butter D. Due to the collapse of the stock market, people don't have as much money to spend.

Answer is B For answer, highlight the area from the top of the quiz, down to hear.