The determinants of the demand for goods and services

• Demand

  The quantity of a good or service that consumers are able and willing to buy at a given price during a given period of time.
• Movements along the demand curve are only caused by changes in price.

  A) Contraction

  B) Expansion

  
• Shifts in the demand curve are caused by changes in factors other than price.

  A) Outward shift (increase)

  B) Inward shift (decrease)

  
• Factors shifting the demand curve:

  • Population
  • Income / wealth
  • Changes to substitutes or complements
  • Advertising
  • Trends
  • Expectations
  • Seasons
• The law of diminishing marginal utility explains the downward slope of the demand curve.