Non Price Factors of Demand

There are various factors other than price that change the Demand of a product or service and hence cause a shift in its Demand Curve.

Income (Disposable Income):

It is the income after income tax and national insurance contributions have been deducted.

When income rises the purchasing power of people increases and thus the demand of the products increases. When income decreases, the purchasing power of people decreases and thus the demand of the products decreases.

Changes In The Price Of Related Products:

Substitute: A product that can be used in place of another (Pepsi or Coke)

Complement: A product that is used in conjunction with another product. (cd player and cd’s)

Advertising:

Successful advertising campaign of a product increases the demand of that product. As it may bring the product into the notice of new customers and may encourage existing customers to purchase more quantities of the product.

Changes In Population:

Weather: