Essential Question: Changes in Demand SECTION 2 Explain what it means when a product’s demand shifts, Describe each of the five non-price determinants of demand, and explain the difference between substitute and complimentary goods.

Shifts in Demand: Changes in Demand SECTION 2 Factors besides price can cause demand to increase or decrease When this occurs, the quantity demanded changes at each and every price. This change is called a shift. This shift is best seen when looking at a demand curve. A new curve will be drawn, shifting to the right or left.

Shifts in Demand (DO NOT COPY): SECTION 2 Changes in Demand Shifts in Demand (DO NOT COPY):

SECTION 2 Changes in Demand Determinants of product demand shifts (Determinants of Demand or D.O.D.) Consumer tastes and preferences- When Consumers suddenly dislike or like new or existing products it can cause demand to go up or down often without logic .

SECTION 2 Changes in Demand Determinants of product demand shifts (Determinants of Demand or D.O.D.) cont. Market size- When a product becomes available to new group of consumers, or a new market, demand can increase or decrease as buyers who did not previously have access may now have demand for a product, if a product is no longer available due to a producer leaving the market, the market size gets smaller and demand decreases

SECTION 2 Changes in Demand Determinants of product demand shifts (Determinants of Demand or D.O.D.) cont. Income- As consumers increase their income, they meet the affordability condition (they already wanted it) to have demand for new products. This can also go in the opposite direction if income drops.

SECTION 2 Changes in Demand Determinants of product demand shifts (Determinants of Demand or D.O.D.) cont. Prices of related goods- When a substitute or complementary good experiences a sudden price change, it can cause related goods to gain or lose demand .

SECTION 2 Changes in Demand Determinants of product demand shifts (Determinants of Demand or D.O.D.) cont. Consumer Expectations- When consumers believe that certain things affecting their ability to have demand (want or afford) may change in the future, it can effect demand in the present

Difference between substitute goods and complementary goods: SECTION 2 Changes in Demand Difference between substitute goods and complementary goods: substitute goods—used to replace the purchase of similar goods when prices increase complementary goods—commonly used with other goods You DO NOT buy comp good unless you purchase the original/substitute good