Factors affecting demand

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Investment

Consumption

Increases popularity of goods and services

Govt Spending

level of individual income

Demand requires an individual to have the ability to pay for g+s, therefore different levels of income will determine whether they will influence demand

Increase in capital

Reduction in production costs

Reduction in price

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personal preferences of consumers

Increase in Government Spending through subsidisation can decrease prices

A consumers personal preference will determine whether they want the g/s. This will affect quantity demanded

Increase in Demand

Increase in Supply of Goods and Services

Extension in Demand, lower equilibrium price

Weather - Changes preferences of goods and services e.g Coffee is more desirable in cold climates

Education and Work Force

Age composition

Higher skilled workers result in increased worker's efficiency, hence increased productivity of firms.

The age composition in a population determines the types of g+s demanded by a particular population

Quality - Increases desirability of goods and services

Increase in Government Spending , increases the amount of money going into businesses, through infrastructure, further increasing employment which increases disposable income, that could be used on goods and services increasing the demand. If demand increases, government spending will also increase due to the higher demand

Price- Subsides makes goods and services more affordable for consumers by decreasing the price by lowering the cost of produc Thus consumers demand for goods and services are increased, despite constant disposable income.

Example: $4 Billion Energy Efficient Home Packages: Governments helped households cut energy usage through the subsidisation of more energy efficient household appliances

Distribution of people

sex

The sex of an individual determines their ability to buy specific g+s and also limits their ability to consume g+s, thus influencing demand of varying g+s

Price

socio economic status

If the price of goods and services are high the product demanded is decreased

the SES of an individual will determine their ability to buy particular g+s and prioritise different g+s due to their ability to buy g+s

Increases accessibility of goods and services through lower prices. Which increases demand

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Decreases proportion of disposable income spent on electricity and theses appliances, therefore there is more money available to be spent on goods and services further increasing effective demand.

If the price of goods and services are low the product is at a higher demand

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Investment is an injection into the circular flow of income. Investment allows firms to raise capital for growth, as they have more money to spend.
Investment allows firms to develop better quality goods and services.
Investment allows consumer wealth to increase and increases individuals income, due to profits sharing (dividends) and a rising value of assets.