Factors that may shift the Demand Curve Flashcards
what are the main factors that may shift the demand curve (6)
- advertising
- income
- fashion and tastes
- price of substitutes
- price of complements
- demographic changes
what is the pneumonic to remember the factors that shif tthe demand curve
DIFAPP
how can advertising shift the demand curve
advertising can shift the demand curve by creating appealing videos and adverts about a certain product, for example coca cola, however it is hard to measure the amount of demand gained from advertising but overall advertising does help demand by putting your product out to a larger audience
how can income shift the demand curve
generally when disposible income rises, demand rises, when peoples wages rise they may want to buy more cars or an extra holiday, these are all normal goods
however inferior goods maybe have less demand due to income rising for example public transport is an inferior good
what is disposible income
income that is available to a person over a period of time including state benefits but excluding direct taxes
what are normal goods
goods for which demand will rise if income rises or fall if income falls
what are inferior goods
goods where demand will fall if income rises of vice versa, examples public transport, or own label supermarket brands
how can fashion and tastes shift the demand curve
over periods of time tastes and fashion can change, for example products during the summer would not be fashionable in the winter, also over years people may find other tastes, for example people have been very inclined to social media, leading to more demand for online servers and online shopping centres
what are substitute goods
goods that are bought as an alternative to another but serve the same function
what are complemetary goods
goods that are purchased togethor because they are consumed togethor
how does price in substitutes affect the demand curve
Substitute goods like pepsi for cola, or different brands of energy drinks can make demand for a product fall, for example if the price of a substitute fell like for cola, then the demand for pepsi would fall since consumers would benefit from buying the cheaper alternative
how does price of complemets affect the demand curve
complementary goods are goods which are bought togethor, like cereal and milk,if the price of milk would rise then the price of cereal would fall
what is demography
study of human populations and the way they change
how do demographic changes affect the demand curve
changes in the population and ratio of minorities to majorities can have a big impact on demand, if there were more people over 60 in a country, here would be a higher demand for senior aid, senior homes and of the such, in some countries like palestine the majority of the population are under ages 18, so there would be more demand for diapers, phones, and children accessories, that is.. if Isreal wasnt bombing the shit out of them
what types of demograhic changes affect the demand curve (4)
- Age distribution
- gender ratio
- geographic distribution, urban to rural
- ethnic majorities and minorities
