DETERMINANTS

OF THE
DEMAND
MARIA ALEJANDRA ANGARITA
Y JOAN SEBASTIAN POVEDA
1. RENT
Income is an important factor in determining the demand
M
AT
for goods and services in an economy. The relationship x
x x
xx
between income and demand can be analyzed from x xx

several approaches:

1. NORMAL ASSET

2. INFERIOR ASSET

3. LUXURY ASSET
AT
4. ELASTICITY OF DEMAND M

xx
x
xx
x
xx
NORMAL ASSET INFERIOR ASSET
GRAPHIC GRAPHIC
 1. COMSUMPTION

2. BUSINESS
INVESTMENT

3. ASSET PRICES

4. INFLATION
2. EXPECTATIONS
Expectations play an important role as a determinant of demand in economic
theory. The expectations of consumers, entrepreneurs and other economic agents
about the future can influence their purchasing, investment and saving decisions in
the following ways:
 3. ASSETS RELATED
Related goods is an important concept in
Substitute
economics that refers to how changes in the price
1. goods
or availability of one good can affect the demand
for another good. Related goods fall into two main
categories: substitute goods and complementary Complementary
goods. Here I will explain how these two types of 2. goods
goods affect demand:
SUBSTITUTE GOODS COMPLEMENTARY
GRAPHIC GOODS GRAPHIC
 $
4. WEATHER
$
Weather can have a significant
impact on demand for a wide $
variety of products and
services. Here are some ways
in which weather can influence
demand:
4. WEATHER

1.Clothes and fashion 3. Turism

2. Aliments and drinks 4. House goods

 $
5. BELIEFES $
Beliefs can influence demand in a number
of ways in the economic and market
context. Here are some ways in which
beliefs can act as determinants of
demand:

1. Quality perception
$
2. Beliefs about value
 $

$
$
6. # OF BUYERS
The number of buyers is one of the key
$
determinants of demand for a good or
service in an economy. It affects demand in $
several ways: $
1. Increase in the number of buyers

2. Reduction in the number of buyers: $

3. Effect on elasticity of demand $

$
7. CULTURE 1. TASTES AND PREFERENCES
2. FESTIVITIES AND CULTURAL
Culture is an important factor that can
influence the demand for products and EVENTS
services in a variety of ways. Culture 3. COMMUNICATION AND
refers to the set of values, beliefs,
ADVERTISING
norms, traditions and behaviors shared
by a group of people, and these 4. VALUES AND BELIEFS
cultural aspects can influence the
purchasing decisions of individuals 5. CONSUMER STANDARDS
within that group. Here are some ways
6. LANGUAGE AND
in which culture can affect demand:
COMMUNICATION
 8. PRICE OF A SPECIFIC ASSET
The price of a good is one of the most important
factors affecting the demand for that good. The
1. Substitution effect
relationship between price and quantity
demanded is described by the "law of demand,"
which states that, holding all else constant, the 2. Income effect
quantity demanded of a good decreases as its
price increases, and increases as its price
Effect of normal
decreases. This is known as an inverse 3. and inferior good
relationship between price and quantity
demanded.
THANK
YOU