Summary of the Impact of Changes in Nonprice Determinants of Demand on the Demand Curve

1. Number of Buyers- Direct Relationship- A decline in the birth rate reduces the demand for diapers.

2. Tastes and Preferences- Direct  Relationship- Must have Christmas toy is the GameCube.

3. Income

Normal Good- Direct Relationship-Consumers’ income rises and the demand for steak rises.

Inferior Good- Inverse Relationship-Consumers’ income rises and  the demand for Mac and Cheese falls.

4. Expectations of Buyers- Direct Relationship- Gas prices are expected to rise  tomorrow so you fill your tank tonight.

5. Prices of Related Goods

Substitute Goods- Direct Relationship-Price of tea falls the demand for coffee rises.

Complementary Goods- Inverse Relationship- A decline in the price of DVD players increases the demand for DVD’s.