Factors causing shift in the demand curve:
- Size of the market: Demand will change or shift if the number
of consumers for the product increases. The demand curve will shift
to the right.
- Income of the consumers: Changes in income shifts the demand
curve. Increases in income increases the demand for normal goods
and decreases in income increase the demand for inferior goods. The
demand curve will shift to the right.
- Increase in the price of related goods. If the price of
substitute goods falls, then there is a shift in the demand. If
price of large cars increase, then the demand for small cars will
increase. Demand curve will shift to the right for small cars. In
case of complements, as an example, if the price of gasoline
increases demand for cars will fall. The demand curve for cars will
shift to the left
- Tastes and preferences of consumers. Demand will depend upon
the tastes and preferences of consumers. If there is a preference
for health foods, then the demand curve for health foods will shift
to the right.
- Expectations: If the consumers expect the prices to fall in the
future, then demand curve will shift to the left.