determinants of S and D - DETERMINANTS OF DEMAND...

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DETERMINANTS OF DEMAND DETERMINANTS OF SUPPLY 1.Tastes and Fashions Tastes and fashions change and are also affected by advertising, trends, health considerations etc. 1. Costs of Production a. Change in input prices: wages, raw materials etc. b. Change in technology c. Organisation changes leading to increased/decreased efficiency d. Government policy including taxes and subsidies. 2. The number and price of related goods Substitutes - the higher the price of substitute goods, the higher the demand will be for this good. If the price of coffee rises then demand for tea will increase. Complements - as the price of complements rises, demand for the complement falls and so too will demand for the good in question. If the price of petrol rises then demand for cars will fall. 2. Profitability of alternative goods in supply. If a farmer makes a greater profit from pineapples than rice, supply of rice will decrease and pineapples increase.
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