Shifts in the Demand Curve

Sometimes certain factors influence consumers to change their demand for a product at a particular price. Demand will either increase (meaning a shift to the right of the entire demand curve) or decrease (the demand curve shifts to the left). The factors that can change demand include:

• A change in consumer preferences. Some goods become fashionalble while others become unpopular.
• A change in disposable income. A change in wages or income tax rates will change the amount of money consumers have to spend and demand.
• A change in the price of a substitute. The demand for a product will rise, for example, if the price of its substitute goes up.
• A change in the price of a complement. If the price of Sony Playstations falls for example, the demand for Playstation games will increase along with the demand for the Sony Playstations.
• The size of the population. Immigration and natural population increase will increase demand for certain goods and services.