Causes of Changes in Demand
1. Changes in tastes, preferences and fashion:
– Increasing habit of taking tea decreases the demand for milk.
– The fashion among, ladies to keep hair long or short brings about changes in demand for hair-pins, hair-net, etc.
2. Climate or Weather Changes: in winter, there is a greater demand for warm clothing. In summer, there is a great demand for electric fans room coolers, cooling drinks.
3. Changes in the size and composition population: If lakh of children born in Bangladesh every day, naturally there will be demand for toys, feeding bottles and nipples etc.
3. Change in Money Supply: Where there is an inflation, additional money will add to the purchasing power of the community. Shortage of sugar increases demand for gur and shakar and restriction of the supply of electricity a demand I’m Kerosene and so on.
4. Change in the Price of the commodity: bower the price, the greater is the demand.
5. Change in Real Income: Change in real income changes in demand.
6. Change in the level and distribution of income: If the wealth is redistributed, tax impose on rich man and spend it for poor. If the household income is larger, consumption is larger.
7. Change in Saving: More saving less purchasing. 8. Change in asset preference: Liquidity preference like ready cash, demand will low.
9. Expectation or Anticipation: If the prices are expected to rise in future, demand of a good increase.
10. Prices of Related Goods: Decline in price of one goods results in a decline in demand for another.