If the government decided to increase taxation, then the demand curve could move to the left, because people would have less disposable income to spend on luxury products such as a piano. However it could be that the extra tax was distributed by the government to go towards the funding of schools. Many schools may then spend the extra funding on music and many schools may buy a school piano sending the demand curve to the right. The income of people has a major factor on the demand curve of pianos. If people’s income increases then they will have more disposable income to spend on luxury products such as pianos, thus shifting the demand curve to the right. However If peoples income decreases then they will have less disposable income to spend on luxuries such as pianos, thus, shifting the demand curve to the left. White-collar workers are the main subject as blue-collar workers probably couldn’t afford a piano with or without an increase in income.
If the price of raw materials increased, for example the cost of hardwoods increased then the cost per unit would increase leading to a higher price and a shift in demand to the left. However if the price decreased then each piano (unit) would cost less and lead to a shift in demand to the right. Environmental reasons would also shift the demand curve to the left if pressure groups damage the reputation of a piano company, for example; the import of ivory and cutting of trees. However if the firm uses environmentally friendly timbre and a substitute to ivory then the demand curve may shift to the right if the firms reputation is good. Finally the demand curve may shift to the right because of the success of a famous musician. For example, a pianist touched the nation with outstanding performances, and therefore giving many young men and women inspiration to become a famous pianist, which leads to an increase demand in pianos.
The main determinants of demand for chocolate are: Advertising, Price of substitutes, Health factors. Other less major determinants are: taxation, income and the weather. This is because chocolate is a less expensive product and in a sense a non-luxury product as, for example a sports car is. A persuasive advertising campaign will shift the demand curve to the right because people will get the urge to consume chocolate more often if they are reminded more frequently. However if substitutes such as toffee and candy bars advertised then demand curve could shift to the left, because people will be urged and persuaded to consume substitutes.
Price of substitutes will also have an affect on the demand curve if toffee, for example goes up twice as much as chocolate then people and retailers would buy more chocolate instead as chocolate’s relative price will attract more attention. Chocolate is a superior product to candy and so the customer satisfaction will increase. However the reverse is true. If candy bars were to lower prices, then the relative price of chocolate would rise, and consumers would be put off and use the cheaper alternatives. In my opinion the shift in demand would be very small either left (if substitutes prices rise) or right (if substitutes prices fall). I think the shift will be minor because, people will tend not to mind as much to pay for less expensive products such as chocolate. they will even tend to buy it or not depending on if they want it or not. People will probably take no notice of the price until at the checkout. However the demand curve will change slightly as there will always be someone who does look for the cheapest product.
Another shift in the demand curve could be due to the weather. If there was a heat wave then consumers would tend to go into a shop and buy more suitable products such as ice cream and lollies. Chocolate will also melt and be less suitable. Market share will increase for lollies and ice cream producers in a heat wave, and therefore probably reduce the market share of chocolate producers. The demand curve would shift to the left. However if the weather took a turn for the worst and temperatures fell, ice cream and lollies would not be a substitute and people would tend to buy chocolate instead of ice cream or lollies.
Time of year will also have an impact on demand. At Christmas and Easter demand will be at a high and new-year and Lent a low. The demand curve would shift to the right for these periods (Christmas & New year).
Designer clothes in the UK market has factors that will affect the demand curve, these include: Income, taxation, price of substitutes and fashion and taste change.
If the price of substitutes are high, for example, an off the peg suit (x) is for sale in a normal shop for one-hundred-fifty pounds. A designer suit (y) is for sale at two-hundred-pounds. The consumer will probably purchase (y) because (y) will have a better relative price, i.e. it will be worth paying an extra fifty-pounds for a designer suit, this is the idea of marginal utility. However if the suit (x) was seventy-pounds then the relative price is increased and the consumer would purchase suit (x) because it would not be worth paying an extra one-hundred-thirty pounds.
Income is important because, designer clothes are luxury products and so rely on consumers disposable income. If there income is increased then people will purchase more clothes, as they have more disposable income. However if people’s income falls then they are less likely to purchase luxury products such as designer clothes, thus shifting the demand curve to the left as opposed to the increase in income where upon the demand curve would shift to the right.
If taxation was to rise then once again, this would decrease the consumers disposable income, forcing them to spend less on luxury products such as designer clothes and so indeed the demand curve would shift to the left. The demand curve would shift to the right however, If taxation was reduced, as consumers would have more disposable income.
Taste and fashion will possibly affect demand, although designers are constantly working to keep up to date with fashion. Obviously advertising campagne will shift demand to the right. Reputation will also have a small affect. If a firm uses cheap labour and exploits workers then there could be a decline in demand. However if all clothes produced are not from sweat shops then demand could be higher.
Some shifts will be bigger than others but all factors will shift the demand curve, even if only a tiny amount.
