Non-Price Determinants that cause shift in the demand curve

There are various determinants apart from price that affect the demand of a product. Some of them are:

1. Taste and Preference

2. Price of Substitute Goods

3. Price of Complementary Goods

4. Income

5. Expectations

 

Let's see in details..

1. Taste and Preference: Change in taste and Preference could change the demand curve. Like change in fashion and trend can increase or decrease the demand of a product.

If a product becomes trendy then it might increase the demand of that product. Sometimes, Advertising campaigns can also affect the preferences of people. A successful advertisement campaign can increase the demand. The demand curve for that product will shift to the right. 

Apart from this government policies can also affect the demand curve.

2. Price of Substitute Goods: A substitute good is a product that offers similar benefits to the consumer as the product produced by the firm's within the industry.  

Like Cola-Cola is a substitute for Pepsi. If Pepsi is more expensive, consumers will switch to Coca-Cola. So here if the price of Pepsi increases, the demand for Coca-Cola increases.

3. Price of Complementary Goods

: Complementary Goods are those goods that are demanded together. There is no use of one good without the other. For example, Car and petrol, these are the things that people consumes together. If cars are more expensive, the price of cars rises. So in that case the demand for petrol will decrease.

4. Income: Basically when income changes, this causes a change in demand , the change itself depend whether it is normal goods or inferior goods.

If the good is normal goods, then an increase in income will cause increase in demand and decrease in income will cause a decrease in demand.

If the good in inferior goods, then an increase in income will cause decrease in demand and an decrease in income will cause an increase in demand.

5. Expectations:  A consumers expectation about the future may affect the demand of a product. If a consumer expects the price to fall, he will wait to buy the product when it is cheaper. In other words, demand will fall and visa versa.