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Understanding Demand Shifts in Economics

This chapter explores how changes in factors other than price influence overall demand. Learn about shifts in the demand curve due to income, taste, market size, consumer expectations, and prices of substitute or complementary goods. Visuals included from page 57.

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Understanding Demand Shifts in Economics

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  1. Chapter 3 Change in Demand

  2. Change in overall Demand – Demand changes due to factor other than price • Demand curve shifts left – Demand decreases. • Demand curve shifts right – Demand increases. • Visuals - Copy the graphs on page 57.

  3. Factors that Shift the Demand Curve • Change in Income – Income goes up, demand increases. Income goes down, demand decreases. • Change in Taste – Items become more or less popular • Change in market size – more or less people are included in the potential market for the product/service.

  4. Factors that Shift the Demand Curve • Consumer Expectations – If people are unsure of their job security, they reduce spending. If consumers are confident of their job security, they spend more. • Change in price of other goods • Substitute goods – Goods that can replace other goods. • Complementary goods – Goods that go together.

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