Exercise 3-3 Graphing Changes to Demand

Factors contributing to changes in demand include: a change in preferences, increases and decreases in income with relation to normal and inferior products, price of substitute products, price of complementary products, expected future prices and income and population changes in income or age distribution (Sayre,Morris)

An example in a drastic demand for a product would be the movie rental business. The two largest players in the industry, Rogers and Blockbuster, are currently in the process of closing stores, liquidating their inventories and laying of staff. Changes in demand for their product were the factors that led to this.

• Preferences change to online distributors and on demand products which offer easier accessibility and convenience for customers.
• A proliferation of new more affordable products from cable, satellite and internet sources utilizes technology which increased supply and lowered prices.