28th November 2019


What effect does greater demand have on prices?

There is an inverse relationship between the supply and prices of goods and services when demand is unchanged. If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher quantity of goods and services.

Similarly, how does a change in expectations affect demand?

The Consumer's Income. The effect that income has on the amount of a product that consumers are willing and able to buy depends on the type of good we're talking about. In other words, for these goods when income rises the demand for the product will increase; when income falls, the demand for the product will decrease

What factors influence the demand for a product?

The demand for a product will be influenced by several factors:
  • Price. Usually viewed as the most important factor that affects demand.
  • Income levels.
  • Consumer tastes and preferences.
  • Competition.
  • Fashions.

What happens when there is a change in one of the determinants of demand other than price?

When factors other than price changes, demand curve will shift. These are the determinants of the demand curve. 1. Income: A rise in a person's income will lead to an increase in demand (shift demand curve to the right), a fall will lead to a decrease in demand for normal goods.
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