What are the determinants of Demand? What is the effect of a change in the determinants of demand?
The determinants of demand are the factors that affect the quantity of a product that is demanded (by consumers) at every given price level. The main determinants of demand include: Income level, Consumer Preferences, Price of Related goods and Expectation of Future Price. Price is not a determinant of demand as it leads to a change in quantity demanded not demand (at every price level).
Changes in the determinants of demand lead to shifts in the demand curve (where quantity is on the y-axis and price is on the x-axis). The result is a change the quantity bought and sold in a given market (say, the market for apples) and a change in the price of the good (such as apples). The constantly changing determinants of demand partly explain why prices change so frequently.
Related Economics A Level answers
All answers ▸Discuss‘looserfiscalpolicy’and‘supply-sidereforms’ that may be used by governments of Eurozone countries to increase economic growth.
What is meant by absolute poverty and analyse how access to clean water, or another essential item, is closely linked to production, income and wealth, within countries and between countries.
Discuss the likely impact of a depreciation of the pound on the UK's economy.
What is the impact of a rise in national minimum wage on the labour market?