Determinants of demand-POV of Buyer

Substitute Good –

A good that can replace another. If the price of one rises, demand for the substitute rises.

Complementary Good –

A good that is consumed with another. If the price of one rises, demand for the complement falls.

Normal Good –

A good for which demand increases when income rises (ex: new clothes, electronics).

Inferior Good –

A good for which demand decreases when income rises (ex: ramen, off

Expectations of Future Price (Demand)

If buyers expect higher future prices, current demand increases; if they expect lower prices, current demand decreases.

Number of Buyers

More buyers shift demand right (increase); fewer buyers shift demand left (decrease).