Many factors affect the law of demand, apart from the price being the main reason there are many other factors affecting demand. Whenever there is a change in non-price factors, the entire curve shifts leftward or rightward whatever the case may be.
In this article, we will explain in detail how other components influence the market demand for goods. Few factors are mentioned below.
Preferences and Tastes of the Buyer – This is one of the most important factors affecting the demand of a commodity. A product for which customers’ tastes and preferences are higher, its demand will increase and so its demand curve. The change in people’s tastes and preferences for different commodity often result in a shift in demand for goods.
The income of the People – The other factor that changes the demand curve is the income of a person. The higher incomes result in higher demand for goods. While illustrating the demand curve for a commodity, a person’s income is stated as given and constant. When an individual income increases, the demand also increases and therefore, the demand curve moves upward and vice versa.
Changes in Prices of the Related Goods – The demand curve is also impacted by the cost of other products, particularly those which are substitutes or supplements. When the demand curve is drawn the related goods prices are taken as remaining constant.
Advertising – Promoting goods through advertising impacts the demand and influences the customer to buy the product. Ads are done through different media such as television, radio, newspapers, etc. Whenever an advertisement becomes successful, it causes an increase in the demand for a good.
The Number of Consumers – The demand for a commodity is acquired by adding a present and expected individual demand at different possible prices. The higher the number of consumers, the higher the market demand for it.
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