Page 93 - F1 - AB Integrated Workbook STUDENT 2018-19

External analysis – economic factors

2.3 Factors affecting demand for a good:

 the price of the good For most goods as P, demand  due to
substitution and income effects

 prices of other goods Substitutes v complementary goods

 income Compare normal goods v inferior goods

 taste/fashion Could be influenced by advertising

 other factors Population size, credit terms.

2.4 Changes in the factors affecting demand

Changes in price Changes in the conditions of demand

Leads to movements along the curve Leads to movements of the curve

P P
D 1 D 2 Shift in demand
D P – Contraction

P – Expansion

Q Q

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