NON-PRICE

DETERMINANTS OF
DEMAND
MARY ROSE L. RAZON
WHAT ARE A NON PRICE DETERMINANTS OF
DEMAND?
• Refers to the factors other than the current price that can potentially influence the demand of a
service or product and hence result in a shift in its demand curve.
THE FOLLOWING LIST ENUMERATES THE NON-PRICE DETERMINANTS OF
DEMAND;
•Branding •Available Income
•Market Size •Complementary Goods
•Demographics. •Future Expectation
•Seasonality
BRANDING

• Sellers can use advertising, product differentiation, product quality, customer service, and
so fortg to create such strong brand images that buyers have a strong preference for their
goods.
MARKET SIZE
• If the market is expanding rapidly, customers may be compelled to purchase based on
other factors than proce, simply because the supply of goods is not keeping up with
demand.
DEMOGRAPHICS

• A change the promotions of the population in different age ranges can alter demand in
favor of those groups increasing in size and vice versa.

SEASONALITY
• The need for goods varies of time of year; thus, there is a strong demand for lawn
mowers in the spring, but not in a fall.
AVAILABLE INCOME

• If the amount of available buyer income change, it alters their propensity to purchase.
• COMPLEMENTARY GOODS
If thrre is a price change in a complementary item, it can impact the demand of a product.
FUTURE EXPECTATION
If buyers believe that the market will change in a future such as may happen with an
ancitipated contriction of supplies, this may alter their purchasing behavior now.
SUPPLY

• Supply is a fundamental economic concept that describes the total amount of a specific
goods or service that is available to customers. Supply can relate to the amount of
available at a specific price or amount available across a range of prices if displayed on a
graph.
DETERMINATS OF SUPPLY

• Factors that influence producer supply cause the market supply curve to shift.
SEVEN TYPES:
1. Change in Technology - State of the art technology that uses high-tech machines
increases the quantity supply of goods which causes the reduction of cost of
production.
2. Cost of Inputs Used – An increase in a price of an input or the cost of production
decreased the quantity supplied because the profitability of certain business decreases.
3. Expectation or Future Price – When producer expect higher price in the future
commodities the tendecy is to keep their goods and release them when the price rises.
4. Change in the Price of Related Goods – change in the price of related goods have a
significant effect in the supply of such goods
5. Government Regulation and Taxes – It is expected that taxes imposed by the
government increases cost of production which in turn discourages production because it
reduces producers earnings.
6. Government Subsidies – The financial aids/assistance given by the government reduce
cost of production which encourages more supply.
7. Number of Firms in the Market – An increase in the number of firms in the market
leads to an increase in supply of goods and services.