Determinants of Demand
1. Tastes and preferences – when our preferences increase, demand increases
2. Consumer's income – when income increases, demand for inferior goods decreases while demand for normal goods increases
3. Expectations about future prices
  • expect future prices to rise = demand goes up = prices go up
  • expect future prices to fall = demand goes down = prices go down
4. Expectations about future income
  • expect income to increase = demand goes up
  • expect income to decrease = demand goes down
5. Price of substitutes and complements
  • Substitutes – if the price of a substitute goes up, the demand for the other goes up (same direction)
  • Complements – (opposite direction)
6. Number of buyers – when the population of buyers increase, demand increases


Stephanie Powers, "ECON 100: Determinants of Demand," (lecture, Red Deer College - Donald School of Business, Red Deer, AB, October 6, 2011).

Stephanie Powers, "ECON 101: Determinants of Demand," (lecture, Red Deer College - Donald School of Business, Red Deer, AB, January 23, 2012).