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In the market of consumer goods, population gets goods for direct consumption and for receiving some satisfaction (utility). Therefore, the demand may change along with changing the desires of consumers or capabilities. Causes leading to these changes are:
1. Changing consumer tastes. Changing consumer willingness to buy various goods may result from changes in their tastes (preferences).
2. Changing the income of consumers leads to increased purchasing capacity of consumers and, therefore, can also lead to a shift in demand curve.
3. Changing the number of consumers can also affect the market demand for any good. For example, the arrival in the country for whatever reasons, immigrants (for example, refugees from other countries) will increase demand for many goods markets, as well as additional consumers also want to consume goods. Demand curve for these goods will shift to the right.
In principle, the gradual increase in the number of consumers is always a result of natural population growth, but this process is proceeding very slowly, and at the same time with enough time to change the conditions of supply.
Regulation of the supply curve depends on many factors, which we assumed to be given. These are all factors that determine the production technology, the prices of resources, as well as the number of producers. Let's take them in order.
It may happening a discovery of a new natural resource, superior in quality used, such as opening a new deposit of ore with an unusually high content of metal. The supply curve of all goods whose production requires metal (as a result of reducing the cost of its production), shifted to the right.- Changing the prices of used resources can also lead to a shift of the supply curve. A prices increase of resources usually leads to a decrease in supply, and vice versa.
- Changing the number of producers of some goods, too, will shift the supply curve of the good.
Supply and demand curves can shift at the same time, and in this case the change in price and quantity depends on the relative values of the shift between the two curves.
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