1. Factors Affecting Demand:
Chapter 4 Section 2

2. Change in quantity demanded shows change in the amount of a product purchased when there is a change in price.

3. Income effect- as prices drop, consumers are left with extra real income.

4. Substitution effect- price can cause consumers to substitute one product with another similar cheaper item.

5. Change in demand- people buy different amounts of the product at the same prices.

6. Cause of a change in demand:
1. Change in income
2. Change in tastes
3. A price change in a related product substitute – product used in place of another product or complement- use of one increases the use of another

7. Substitutes

10. 4. Consumer expectations
5. Number of buyers.