Changes in Demand

Changes in Demand A demand curve is accurate only when all other factors are constant When things do not remain constant, the demand curve shifts The Quantity demanded (Qd) changes at every price because of something other than a price changed

Change in Demand Price Quantity

Does a change in the price of goods shift the demand curve? NO!!!

A change in price causes a movement along the demand curve A change in price causes a movement along the demand curve. This is called a change in quantity demanded

The causes of a demand curve shift Substitute & compliment price changes Consumer Expectations Population Consumer Tastes and Advertisements Others…

Substitutes Something that is similar to another product When the price of good A increases and causes the demand for good B to increase, than the two goods are substitutes.

Compliment When a decrease in the price of one good causes the demand for another good to increase Happens with two goods that are bought and used together

Normal Goods vs Inferior Goods a good that consumers demand more of when their income increases A good that consumers demand less of when their incomes increase Since you make money, you can afford something better.

Normal or Inferior Good?

Consumer Expectations Expectations about the future What if someone told you a bike would be on sale in a week, which way would the demand curve shift on that day you found out about the impending sale?

Consumer Tastes and Advertising Fads affect demand

Advertisements Good advertisements can increase demand

Partner Activity In your bell work please do the following: Write a specific market at the top (Shoes for example) Write a scenario that will impact that market (Adidas spends 50 million dollars on a new advertisement campaign). Pass the paper behind you

Partner Activity Read your market and the scenario. Determine if the scenario would have an effect on the demand curve. If it does, correctly shift the curve If it has no effect on the demand curve, than don’t shift the curve and show the correct impact… Then explain why. The demand may increase or decrease in some cases