Understanding Determinants of Demand in Microeconomics

It is quite obvious that price is one of the most important determinants of demand. Nevertheless, there are other factors in addition to the price that affect the demand curve. Let’s watch the upcoming video and hear what Chris has to say on this. 

As you learnt from the video, there are many determinants of demand, of which some major determinants are as follows: 

1. Consumer income: Change in consumer income can shift the demand curve either left or right
2. Future expectations: Consumer's expectation about the future (for example, the expectation of a newer version of the product to release in the future) affects the demand for goods and services today 
3. Price of related goods: Change in price of a good, will affect the price of a related good, like a substitute or a complement
4. Number of customers: Change in the number of customers shifts the demand curve either left or right

Now, in the next video, we will take a look at our Cleveland-New York housing market example to understand this better.

So, as you learnt in the video, the demand curve shifts due to a change in any of the factors mentioned below.

Price changes alone do not shift the demand curve. Rather, they move the quantity demanded along the existing demand curve.