Demand Shifts
Definition
Demand shifts refer to changes in the quantity of a good or service that consumers are willing and able to purchase at different price levels, caused by factors other than price. These factors include changes in consumer income, preferences, population, and expectations.
Analogy
Imagine you're at a concert where the demand for tickets is high. Suddenly, your favorite artist announces they will be performing an extra show. This announcement causes a shift in demand as more people become interested in buying tickets.
Related terms
Complementary Goods: Complementary goods are products that are used together with another product. For example, if the price of hot dogs decreases, the demand for hot dog buns will increase.
Substitute Goods: Substitute goods are products that can be used as alternatives to each other. If the price of coffee increases significantly, some consumers may switch to drinking tea instead.
Elasticity of Demand: Elasticity of demand measures how responsive the quantity demanded is to changes in price. If a small change in price leads to a large change in quantity demanded, we say demand is elastic.
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