Can also affect willingness to pay because of a change in preferences An

Can also affect willingness to pay because of a

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Can also affect willingness to pay because of a change in preferences. - An increase in income can lead to a stronger preference for some goods and weaker for other goods. Normal goods = quantity demanded increases when income increases. Inferior goods = quantity demanded decreases when income increases. 2. Tastes and preferences: Affects perceived benefit, and thus willingness to pay. Determined by fashion, advertising, information, hype, media, demographics. 3. Number of buyers: Market demand is the sum of the quantity demanded of all buyers in the market. - Population. - Demographics. 4. Price of related goods: Substitute goods = goods that are used as alternatives to one another. - The demand for a good is positively (directly) related to the price of a substitute good. Complement goods = goods that are used together. - The demand for a good is negatively (indirectly) related to the price of a substitute good. 5. Expectations of future price changes: If buyers expect prices to increase in the future, they buy as much as they can as soon as they can. If buyers expect prices to fall in the future, they delay their purchasing for as long as they can.
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