complements tend to be consumed together, a fall in the price of one will
increase the quantity demanded of both products. Thus, a fall in the price
of a complement for a product will shift that product’s demand curve to
the right. More will be demanded at each price. For example, a fall in the
price of airplane trips to Calgary will lead to a rise in the demand for ski-
lift tickets in Banff, even though the price of those lift tickets is
unchanged. (The demand curve for ski-lift tickets will shift to the right.)
- Consumers’ Tastes
Tastes have a powerful effect on people’s desired purchases. A change in
tastes may be long-lasting, such as the shift from typewriters to
computers, or it may be a short-lived fad as is common with many
electronic games. In either case, a change in tastes in favour of a product
shifts the demand curve to the right. More will be demanded at each
price. Of course, a change in tastes against some product has the opposite
effect and shifts the demand curve to the left.
- Population
If there is an increase in population with purchasing power, the demands
for all the products purchased by the new people will rise. Thus, we
expect that an increase in population will shift the demand curves for
most products to the right, indicating that more will be demanded at each
price.
- Significant Changes in Weather