What would have been a good investment in 1971?

- Originally, cost $0.10 (June 1938) - In 1971, you could have bought this comic for $300.00 - Recently, this comic (in mint condition) sold at an auction for $137,000.00!!

Now, lets look at the numbers of another example: Amazing Adult Fantasy (1st Spiderman) 1971 $10.00 1975 $40.00 1979 $360.00 1983 $1,100.00 1987 $1,100.00 1991 $7,000.00 1994 $11,000.00

By what percentage did the value of the comic go up? 1,100 %

The reason that this happens is because of an economic concept known as the “The Determinants of Demand.” sometimes we also call them NON-PRICE FACTORS. 1.) Tastes and Preferences: As consumers' tastes or preferences change, the demand for products will also change. 70s 80s Today??

2.) Number of Consumers: If more buyers enter a market, the demand for the product will increase. “What about rule #1?” "Good evening. You all know the rules of King of the Mountain. Rule number one: you do not talk about King of the Mountain. Rule number two: there are no rules." ”That’s more of a guideline than a rule… DO NOT interrupt!”

3.) Consumer Income: As consumers' incomes change, the demand for goods and services will change. For most products, demand increases when consumers have larger incomes. These types of goods are called “normal” goods: For some products, however, demand actually decreases when consumers have larger incomes. These types of goods are called “inferior” goods:

4.) Price of Related goods: When the prices of related goods change, demand may increase or decrease. In this category, there are also two types of goods: When a good can be used in place of another, it is called a “substitute” good. Generally, when the price of something rises, people tend to buy the substitute. On the other hand, when goods are generally purchased together, they are called “complimentary goods.” Generally, when the price of one compliment rises, people tend to buy less of the substitute.

5.) Consumer Expectations: Changes in consumer expectations about the future can cause changes in the current demand for products. For instance, if people think it’s going to be cold in the coming months (because it’s winter), they will buy more warm clothes now… Or…if you hear that a new Apple Tablet CPU is coming out in a few months, it might deter you from buying a new computer now…

T – R – I – B - E T = Tastes and Preferences R = Related goods As a helpful reminder to remembering the Determinants of Demand (Non-Price Factors), since they might (ahem) show up on a test, here is a handy way to remember them… T – R – I – B - E T = Tastes and Preferences R = Related goods I = Income (consumers) B = Buyers (number of) E = Expectations (consumer)

Now, applying these ideas to a Demand Curve is Simple: 1.) Whenever there is a change in Price, there is a shift along the Demand curve: In this example, moving from point X to point Y means we move from Price 1 (P1) to Price 2 (P2) and Quantity Demanded moves from Quantity 1 (Q1) to Quantity 2 (Q2). It’s like moving ALONG the curve.

A SHIFT of the curve is known as a change in Demand. 2.) Whenever there is a change in anything besides price (hence “non-price factors”), the whole demand curve SHIFTS due to the determinants of demand. An increase in demand means the graph will move to the right (out from D1 to D2): An decrease in demand means the graph will move to the left (in from D1 to D3): Price D3 D1 D2 Quantity REMEMBER, in economics a moving ALONG the curve is known as a change in the Quantity Demanded. A SHIFT of the curve is known as a change in Demand.

Now kids, since we know about the Determinants, how can we use them to understand what happens with collectibles like comic books? Tastes and Preferences: Collecting comic books became "cool" for baby boomers. Consumer Income: Potential collectors, as they become older, tend to have higher incomes providing more discretionary dollars to spend on comics and other collectibles. Price of Related Goods: If prices of alternative collectibles, such as baseball cards or toys, increased more rapidly, this could cause an increase in the demand for comic books as baseball card collectors switched to comic books. Number of Consumers: The number of potential buyers increased as baby boomers became adults. Consumer Expectations: Buyers expected prices to increase as the number of collectors increased. Buyers also knew the supply was limited; for some older books it is fixed and/or diminishing.

ANY QUESTIONS???