Study Notes
Shifts in Market Demand
- Level:
- AS, A-Level
- Board:
- AQA, Edexcel, OCR, IB
Last updated 26 Jan 2019
This study note looks at the causes of shifts in market demand
Key summary
Give me 5 reasons why demand may increase (i.e. the demand curve shifts to the right)
- Increasing income (for normal goods)
- Decreasing income (for inferior goods)
- Rising price of substitutes
- Falling price of complements
- Effective advertising
Give me 5 reasons why demand may decrease (i.e. the demand curve shifts to the left)
- Change in consumer tastes and preferences away from the product
- Rise in interest rates leading to a fall in demand for products bought on credit
- Expected fall in prices leading consumers to delay their purchases
- A rise in unemployment during a recession
- A rise (appreciation) in the exchange rate which makes import (substitutes) cheaper
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