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Reasons for shifting the demand curve

Reasons behind shifting demand curve

There are reasons that lead to a change in the demand curve, and these reasons lead to a change in the factors of the demand curve such as average income and preferred demands, which are the reasons responsible for changing the demand curve from the right or to the left, or to an increase or decrease in the quantity of demand or the price of demand. There are also several factors that determine demand Prices and quantities required There are factors that lead to stability in demand and quantity.

Demand is determined based on the size of the products that the consumer wants to buy, but he can also buy them at different prices. The desire to buy within the economic market is defined by preferences, and the ability to buy indicates the importance of income. The prices of various commodities can also influence the determination of the volume of demand. The factor affecting the demand curve is population density.

The main factors in the stability of the demand curve

There is a variable relationship between the demand curve and the supply curve, and the quantity of demand is determined by the price. Therefore, the economic factors behind determining the demand curve and supply curve by determining the price of the product are considered. Economists consider that the laws of supply and demand are not always correct. Among the basic factors that affect the stability of the demand curve are the following:

  • income

When the average price of a commodity is not expensive or people can buy it, then the commodity may be liked by many people and become a commodity that gets a lot of demand and this income may affect the demand curve, but this is not necessary. The quantity demanded of commodities changes as a result of individual demand, it must be collective demand But the only difference here is that not everyone is equal in the highest income or the lowest income, but it is certain that income affects the demand curve of the entire market.

  • normal merchandise

Income rises when the demand for a particular commodity rises and vice versa, but there are some exceptions where the number of demand will increase with the rise in income, and it is possible that many people buy a large number of ordinary goods and this category is considered to be low-income and in this case the products will become The higher price lower the demand even at higher income and it will be called the inferior good in which case the demand curve for the inferior good will shift to the left.

Other factors that affect the demand curve

There are other factors that affect the demand curve besides income, and these factors are essential in transforming the volume of demand, such as preferences, population density, prices of various commodities, expectations of prices of low and high goods, and also the size of the quantity demanded of people, that is, the volume of purchase of certain goods at a specific purchase price. Demand curve where the new demand curve is on the right and the lower demand curve is on the left compared to the main curve.

  • related merchandise

The prices of goods affect the demand curve towards basic goods and other goods which are called complements or substitutes, and supplements and substitutes are goods or services that we can use in place of the basic good such as printed books or e-books that are an alternative to the original books which are characterized as having a low price and other examples That in recent years, when the demand for tablet computers increased and the demand for this commodity became high according to the demand curve, as a result, the demand curve for other computers became lower and this led to a rise in the cost of the price of the alternative commodity.

Therefore, within the markets there are many complementary goods to each other, and one good promotes the consumption of the other good, such as if the price of the golf club goes up, the law of demand for this good will decrease and with it the demand for the price of the complementary good such as golf balls will decrease. The demand curve is for a substitute or complementary good such as trips to ski resorts.

Changes in expectations or other factors affecting demand

It is certain that a commodity or a commodity affects the quantity demanded of a commodity and also expectations about the future prices of commodities will affect the demand curve and also expectations about preferences and income will affect the demand curve. To store a large amount of coffee, this changes the demand curve and will change other economic factors. [1]

How do production costs affect supply

The demand curve shows the change that occurred in the quantity supplied and the change in the price increase or decrease in price, and therefore the demand curve changes according to the change in the quantity of goods supplied at each price change, and this change means that the quantity supplied also changes at each price, so we must think about all the factors that affect In supply, such as profits, revenues, costs, production of goods, use of labor, costs of materials and machines, which are called in the economic market the inputs and production factors, and this means that when production costs decrease within a company while the prices of goods or services provided remain constant without change, this means an increase in the profits of this company.

And when this company reaches profits, the volume of production will increase, and the higher the volume of production, the higher the profit as well, but in the event that the production costs decrease, the company will provide and determine the prices of goods according to the production price and this will appear within the demand curve and the supply curve. Examples of this are companies that It distributes its goods or services on gasoline . In the event that the price of gasoline increases, which is one of the most important costs of the company, this company will replace this option by remote correspondence to reduce the company's production costs . Farther distances and increased supply in order to use alternative, low-priced petrol goods.

On the contrary, if the company pays higher production costs, this means that there are lower profits even when the price of its own product is changed or reduced, as high production costs lead the company to distribute lower goods at any price of the commodity and this also appears on the demand curve and supply curve in Left Lane.

Other factors affecting supply

Among the factors that affect the demand curve are the prices of the inputs within the production process, which thus affect the supply, and among the many factors that can affect the supply curve

  • Weather conditions.
  • natural conditions.
  • Use of new technologies in production.
  • government policies.

For example, in 2014, agricultural production was affected as a result of natural changes within northeastern China , which affected the production of wheat, corn and soybeans in the country due to the drought that occurred due to bad weather, as the drought reduced the quantity of supply and the remaining small quantity offered at any price, and this means Natural or atmospheric changes can alter the demand curve and supply curve. [2]


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