Non-Price factors of Demand Flashcards
Non-price factors of demand definition
These increase/decrease the quantity demanded at any given price, causing a shift in the demand curve
Non-price factors of demand - Disposable Income
-Money available after tax
-More disposable income means increased ability to purchase at any given price
Non-price factors of demand - Demographics
-Ageing population (like in Australia) can mean specific increases in demand for goods like age care
-Increased population size means higher demand for all g+s at any price
Non-price factors of demand - Fashion, taste
Advertisements, social media can alter taste, increasing demand for set or complementary goods at any given price
Non-price factors of demand - Interest rates
-Refers to cost of borrowing, return on savings
-Increase interest rates means more saving, less spending, decrease demand
Non-price factors of demand - Price of substitutes
-A type of g+s that can be easily replaced by another
-If price of one substitute increases, consumers will look to relatively cheaper substitute product, demand decreases
Non-price factors of demand - Complementary g+s
-G+S which are bought/ used at the same time
-As price of one complementary item rises, quantity demanded for the other decreases also
Non-price factors of demand - Consumer and business confidance
-Relates to how firms, consumers feel about their future economic conditions and situations
-Pessimistic views will lead to saving, decrease demand
Non-price factors of demand - Seasonal change
Summer products have a decrease in quantity demanded in winter
Non-price factors of demand - Government policy and regulation
-Cash subsidies decrease cost of production and inflation, increase demand
-Tax decreases disposable income levels, decrease demand
Non-price factors of demand list
-Consumer and business confidence
-Disposable income
-Seasonal changes
-Interest rates
-Complementary g+s
-Substitute g+s
-Gov regulation
-Demographics
