Determinants of demand are factors that cause fluctuations in the economic demand for a product or a service.

A
shift in the demand curve occurs when the curve moves from D to D₁, which can lead to a change in the quantity
demanded and the price. When price changes, quantity demanded will change ceteris perebus. When factors other than
price changes, demand curve will shift.

1. Prices of related goods or services. The price of complementary goods or services

raises the cost of using the product you demand, so you'll want less. For example,
when gas prices rose to $4 a gallon in 2008, the demand for Hummers fell. Gas is a
complementary good to Hummers. The cost of driving a Hummer rose along with gas
prices. When the price of a substitute rises, people will want more of the good or service
and less of its substitute. (Oppo vs Samsung)

2. Expectations about future prices. When people expect that the value of something will
rise, they demand more of it. That explains the housing asset bubble of 2005. Housing
prices rose, but people bought more because they expected the price to continue to go
up. When housing prices fell 30 percent, the quantity demanded didn't grow because
people expected prices to continue falling. If consumers expect the price of a good
increases in the future, the demand for the good at current period will increase. If they
expect price to fall in the future, demand now decreases bcs people will wait for the price
to fall.

3. Population/Number of buyers. As more buyers enter the market, demand rises even if
prices don't change. That was another reason for the housing bubble. Low-cost and sub-
prime mortgages increased the number of people who could afford a house. The total
number of buyers in the market expanded. This increased demand for housing.

4. Level of taxation.

5. Tastes and Trends. If a product becomes fashionable, the demand for it will increases.
If a product is out of date, the demand for it will decreases. Consumers will forfeit old
goods in favor of buying new, trending goods.

6. Advertisement. Brand advertising tries to increase the desire for consumer goods. For
example, Buick spent millions to make you think its cars are not only for older people.

7. Consumer’s Income. The income of a consumer affects his/her purchasing power. A

rise in a person’s income will encourage the person to increase their demand. For
example, when a father’s income increases, he would buy more groceries for his
household.

8. Festive seasons and climate. Individuals demand different products in different climatic
conditions. For example, the demand of ice-creams and cold drinks increases in
summer. During festive seasons, demand for products for celebration increases. For
example, during Hari Raya, baju kurung will be in high demand.