Change in Demand

In economics, a change in demand can be caused by many things. One thing that can cause a change in demand is when the price of a product or service drops. All other things remaining the same, when the price of a product or service drops, the demand for the product or service will increase. When the price increases for a product or service, the demand for the product or service will decrease to

the increase in price. Another thing that can cause a change in demand is when a product used with the specified product has a change in demand. For example, peanut butter and jelly are often used together. If the demand for peanut butter changes, the demand for jelly will likely change as well because the two products are complementary. If the price of a product that can be considered a substitute changes, then the demand will change as well. For example, if the price of Coke goes up, the demand for Pepsi will increase, because Pepsi is an acceptable substitute for Coke.