- Shift in demand
- A shift in demand means that at every price the quantity demanded is different from what it was before.
- Movement along the demand curve
- A movement along the demand curve is the change in quantity demanded caused by a change in the good's own price.
Conditions of demand
Can you name the five conditions of demand?
A change in any one of these shifts the whole curve.
Income is what buyers have to spend: a rise shifts demand for a normal good to the right and demand for an inferior good to the left.
Can you think of an example?
Incomes rise, so more new cars are bought at every price and fewer used ones, as buyers trade up.
Tastes and preferences are how much buyers want a good, which changes with fashion, health news and habit.
Can you think of an example?
Health reports warn people off red meat, so more choose chicken: demand for chicken shifts right and demand for beef shifts left at every price.
The size and composition of the population is how many buyers there are and who they are, such as their ages.
Can you think of an example?
A country with more older people has a higher demand for care homes and hearing aids, and a lower demand for pushchairs.
The prices of related goods are those of substitutes and complements: a dearer substitute shifts demand right, and a dearer complement shifts it left.
Can you think of an example?
As tablets get cheaper, fewer laptops are wanted at every price. Dearer golf clubs shift demand for golf balls left.
Expectations are what buyers believe about future prices, incomes or events, which can change how much they buy today.
Can you think of an example?
Shoppers hear that coffee will cost more next month, so they stock up now and demand shifts right today.