Why Do Demands Of A Certain Product Change?

A change in demand means that factors that determine demand have changed. Changing level of income is one reason why demand of products change. If incomes rise the demand will increase as the consumers will be able to afford that particular product. However and increase in income can also cause decrease in demand for inferior goods. For instance increase in income means decrease in demand for beer and rise in demand for wine. If income becomes more unevenly distributed, demand for luxury goods will be more while the demand for basic necessities will decrease.

Many goods have substitutes so if price of one increase the demand of its substitute also increase. For example if butter prices go up people will switch to margarine. If public transport fares go up people switch to private transport or if bus fares shoot up people start using trains. Some goods are complementary like cars and petrol so an increase in petrol will cause a decrease in demand for cars. Goods such as clothes and shoes are linked to fashion and their demand changes as fashion changes.