Future or when credit is easy to obtain demand might

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Unformatted text preview: r when credit is easy to obtain, demand might increase now. For example, a salesperson gets the news that she will receive a big bonus at the end of the year, so she goes into debt and buys a new car right now. Population Demand also depends on the size and the age structure of the population. The larger the population, the greater is the demand for all goods and services; the smaller the population, the smaller is the demand for all goods and services. For example, the demand for parking spaces or movies or just about anything that you can imagine is much greater in New York City (population 7.5 million) than it is in Boise, Idaho (population 150,000). Also, the larger the proportion of the population in a given age group, the greater is the demand for the goods and services used by that age group. For example, during the 1990s, a decrease in the college-age population decreased the demand for college places. During those same years, the number of Americans aged 85 years and over increased by more than 1 million. As a result, the demand for nursing home services increased. *An energy bar is a normal good. Preferences Demand depends on preferences. Preferences determine the value that people place on each good and service. Preferences depend on such things as the weather, information, and fashion. For example, greater health and fitness awareness has shifted preferences in favor of energy bars, so the demand for energy bars has increased. Table 3.1 summarizes the influences on demand and the direction of those influences. A Change in the Quantity Demanded Versus a Change in Demand Changes in the influences on buyers’ plans bring either a change in the quantity demanded or a change in demand. Equivalently, they bring either a movement along the demand curve or a shift of the demand curve. The distinction between a change in the quantity demanded and a change in demand is 9160335_CH03_p053-080.qxd 6/22/09 8:56 AM Page 59 Demand the same as that between a movement along the demand curve and a shift of the demand curve. A point on the d...
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