Factors affecting Demand
Non – Price Factors
- Changes in non – price factors will cause a shift in the demand curve
Factors affecting Demand
- Income - rise in income leads to a shift right (more disposable income)
- Interest Rates - rise in interest rates leads to a shift left (greater mortgage interest payments -> less disposable income)
- Price of Complementary good - rise in the price of a complementary good will cause a shift left.
- Price of Substitute good - rise in price of a substitute good will cause a shift right (less price competitive)
- Population - an increase in population causes a shift right
- Fashion - increase in fashion/trends causes a shift right
- Advertising - increase in advertising causes a shift right
