1. Shifting Demand

2. Demand Increases  Demand Curve shifts right Demand Decreases  Curve shifts left

3. Demand Curve Shift

4. Factors for shifts Income Get a raise; get pay cut; get laid off… If you get a raise and buy more of something (xBox games) it is a normal good; If you get a raise and buy less of something (store brand cereal) it is an inferior good If you get a raise but still buy the same amount it is a neutral good (think gasoline; you HAVE to buy it to move your car)

5. Factors for shifts Preferences Society starts to change what it wants Look at smartphones: iPhone’s don’t control the market anymore

6. Factors for shifts Prices of Related Goods Substitutes for one product mean if the price of one goes up, demand for the other goes up The cost of a BigMac goes up so more people will go out for a Whopper Complements when price goes UP for one product (tennis rackets) demand for the other thing goes down (tennis balls)

7. Factors for shifts Number of buyers Population size, birth rate, death rate, war, etc. Future price If the price will be HIGHER later, buy it now! (stocks) If the price will be LOWER later, buy it later! (house)

8. Demand: Increase or Decrease?

9. When should I buy?