Map of Riedholz on Changes in income and prices of other commodities would also affect the budget and consequently would be expected to influence consumption patterns even in the absence of a change in the price of the product in question. Hence, changes in income and prices of other commodities would be expected to lead to changes in demand as an individual would choose to consume more or less of an item at any given price. Changes in the shape of the indifference curve brought about by changes in preferences would also be expected to lead to changes in demand. Factors influencing consumer preferences include, but are certainly not limited to, quality, style, weather, age, tastes, advertisement, etc.
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The significance of demand in MICROECONOMICS is obvious as it, along with SUPPLY, directly influences prices, and in so doing determines the allocation of resources in a capitalist economy. An increase in demand indicates that consumers would choose to purchase more of a commodity at any given price. In other words, consumers either want or need the product more than they did previously regardless of price. Map of Riedholz 2016.
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