Short note: factors affecting demand

Demand is the quantity of a good that consumers are willing and able to buy at a given price during a given time. The demand function is D = f(price, income, price of related goods, tastes, expectations, population, ...).

Main factors

1. Price of the commodity. Usually, when price rises demand falls (law of demand), shown by movement along the demand curve.
2. Consumer income. For normal goods demand rises with income; for inferior goods it falls.
3. Prices of related goods. Substitutes (tea and coffee): a rise in the price of one raises demand for the other. Complements (car and petrol): a rise in one price lowers demand for the other.
4. Tastes, habits and fashion. Changes in preference shift demand.
5. Population and its structure. Size, age, and sex mix change the market.
6. Expectations of future price or income. If prices are expected to rise, people buy now.
7. Advertising and promotion.
8. Government policy. Taxes, subsidies, import duty and credit rules.
9. Seasons, climate and festivals (Dashain, winter clothes).
10. Income distribution and credit availability.

A change in price causes movement along the curve; a change in any other factor shifts the whole demand curve.