Factors Affecting Demand

Read this to learn about how factors that affect demand, such as income and change in tastes, are graphed as shifts of the demand curve. Make sure to answer the "Try It" questions.

Other Factors That Shift Demand Curves

Try It

Question 1

Natalie runs a fast food stand selling hot dogs and soft drinks. A decrease in the price of which good below is likely to negatively impact her bottom line?

    • t-shirts
    • mustard
    • hamburgers

Question 2

Over the past 10 years consumer incomes have grown by 15%, while the price of automobiles has increased by over 20%. Tires and automobiles are complement goods. What would be a reasonable expectation regarding the demand for tires today compared to 10 years ago?

    • The demand for tires will shift to the right because of the income effect.
    • It is impossible to know with the given information.
    • The demand for tires will shift to the left because the price of the complement good-automobiles- has increased.