Determinants of Demand

In economics, we have learned that price is the major factor on the quantity demanded. Many decisions and results have often depended only on prices of goods and services. However, passages of time allow factors other than price to influence demand significantly. These factors are called the determinants of demand and they include consumer tastes and preferences, market size, income, prices of related goods, and consumer expectation. Change in any one of theses determinants can …

…replaced by BMW products. Consumer expectations can dramatically influence shifts in the demand curve. For example, if ones expects his or her income to increase over a period of time, his or her desires to consume goods will likely to increase. However, if a person anticipate a lower income because of a series layoffs like the world today, he or she might delay and possibly cancel some of the purchases causing the demand to decrease.