PowerPoint Presentation

Demand Shifters

1Let's Take A Look At The Five Demand Shifters[Tribe]

2Concentration on these slides is guaranted to improve your economics grade.

Warning3

D1 D2P

QD1QD2

1."Change in Taste"[Direct]

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Complement[Inverse]Substitute[Direct]MilkCerealPop TartsD1D2PP1QD1P2D1D2

DP

2. Related Goods prices'[Substitutes-Direct; Complements-Inverse]

QD2

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D1 D2P

QD1QD2

3. Change in Income[Normal-Direct; Inferior-Inverse]

More incomeresults inmore demandfor new cars;less demandfor used cars.

New Cars

Used CarsLess incomeresults inmore demandfor used cars;less demandfor new cars.

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D1 D2P

QD1QD24. Change in Market Size [Direct][Number of Consumers]

More demand for both newand used cars

New CarsUsed Cars

This is what we told 1 billion Chinese, as potential consumers, when we opened trade relations with them in the 70s.

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D1 D2P

QD1QD25. Expectations [of consumers][about future price, availibility, & income]

If Steve Jobs responds to iRate customers whobought the iPhone at $599 and says, iSorry,we will raise the price back to $599 in 3 weeks.iPhone

$399Buy it now to save money.

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D1 D2P

QD1QD25. Expectations [of consumers][about future availibility of toilet tissue]

If there is expected to be a major shortage of toilet tissue,then consumers will stock up now or risk not getting any.

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D1 D2P

QD1QD25. Expectations [of consumers][about future income]

Lets say that we are coming out of recession & consumersfeel secure about their jobs. [Positive future income]

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D1D2P

QD1QD25. Expectations [of consumers][about future income]

Lets say that we are going into a recession and consumersdont feel secure about their jobs. [Negative future income]

11The End

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