Conditions of demand

Conditions of demand

What causes a movement along the demand curve?

• Price only

• Ceteris Paribus

Factors influencing demand other than price:

PASIFIC

• Population

• Advertising

• Substitutes

• Income (Disposable)

• Fashion and Taste

• Income tax

• Complements

A demand curve can shift to the right or to the left when there is a change in the conditions of demand.

Multiple Choice

Which of the following would cause demand curve to shift to the left?

• Fall in income

• Fall in price

• Fall in the price of complements

• Successful advertising campaign

Poll

Shifts in the demand curve result from factors other than changes in price.

• yes

• no

• not sure

Open Ended

Changes in conditions in demand can be caused because of

1 (a) Identify three causes of a change in the demand for a good. [3]

A combination of excess supply, weak consumer demand and competition from new channels such as the internet has pushed prices down in shops for goods from clothing to electrical products.

(b) Using demand and supply analysis, explain whether the reasons given in the above extract would lead to the stated effect on prices. [4]