With a change in demand, the entire curve shifts when something other than price changes. increase in demand decrease in demand D1D1 D1D1 P Q P Q 0 0 D2D2.

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With a change in demand, the entire curve shifts when something other than price changes. increase in demand decrease in demand D1D1 D1D1 P Q P Q 0 0 D2D2 Shift right D2D2 Shift Left Change in Demand

1. Change in Consumer Tastes advertising, news reports, fads, etc. that affect people’s decision to buy a product popular g/s? Shift Right unpopular g/s? Shift Left Five Reasons for a Change in Demand Non-price Determinants

Changes in income affect how much consumers can buy income , demand  so demand curve shifts right (and vice versa) 2. Change in Consumer Income

Market size is the number of people who have access to buy the good being graphed P roduct available to a larger # of consumers demand curve shifts right (and vice versa) 3. Change in Market Size (Population)

Consumers will change what they buy NOW based on what they think will happen in the FUTURE If buyers think price will , they will buy NOW – Shift right If future economy looks like a recession (bad) they will stop buying NOW Shift left 4. Change in Consumer Expectations

A.Substitute - can use one good in place of another Ex: Price of butter  then demand for margarine  margarine curve shifts right B. Complement - one good needed to use another good Ex: Price of peanut butter  then the demand for jelly  jelly curve shifts left 5. Change in the Price of a Related Good

TIMER Taste Income Market Size Expectations Related Goods Five Reasons for a Change in Demand

Change in QD vs. Change in Demand The price of Coke increases. Draw the change in the Coke market and the Pepsi Market D1D1 D1D1 P Q P Q 00 D2D2 Market for Coke Change in Price of coke Change in QD P1P1 Q1Q1 Q2Q2 P2P2 Market for Pepsi No price change Change in D – Substitute good