Changes in Demand

In a mixed economy there are numerous forces which change demand. They can be grouped as follows:

·         A change in preferences towards the product

·         A change in income

·         A change in price for a substitute product

·         A change in price for a complementary product

·         The expectation that future prices or income will change

·         An increase/decrease in population or a change in its income or age distribution

Example: In a small town a new bigger project was launched. A lot of local skilled workers got new job offers. They expect their income to increase. So they are going to spend more money for groceries. In my example below they will buy more strawberries.

Change in Demand for Strawberries
Price	Demand D1	Demand D2
$       2.50	110	120
$       3.00	105	115
$       3.50	100	110
$       4.00	95	105
$       4.50	90	100
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