There are five important factors that can shift the demand curve: (determinants of demand)

Changes in the prices of related goods or services

Changes in income

Changes in taste or preference

Changes in expectations

Changes in the number of consumers

Changes in the prices of related goods or services: Substitutes & complements

Changes in Income

When individuals have more income, they are normally more likely to purchase a good at any given price.

Most goods are normal goods: the demand for them increases when consumer income rises.

Some goods are inferior goods: the demand for them decreases when income rises. 

Changes in Taste or Preference

A change in taste has an important impact on demand. When taste or preference changes in favor of a good, more people want to buy it at any given price.When taste or preference changes against a good, fewer people want to buy it at any given price.

Changes in Expectations

Expected changes in future price 

Expected changes in future income

Changes in the number of consumers

An increase in the number of buyers, holding other factors constant, increases the demand for a good. (more people lead to more demand)

An decrease in the number of buyers, holding other factors constant, decreases the demand for a good.

Understanding Shifts of the Supply Curve

There are four important factors that can shift the supply curve: (determinants of supply)

Changes in input prices

Changes in technology:Technology: all the methods people can use to turn inputs into useful goods and services.

When better technology becomes available---supply decrease?or increase?

Changes in expectations:An increase in the anticipated future price of a good or service reduces supply today.

(stock up goods and sell them when the price rises to earn more profit)

An decrease in the anticipated future price increases supply today.

(get rid of goods to avoid more losses)

Changes in the number of producers

An increase in the number of producers, holding other factors constant, increases the supply for a good. 

An decrease in the number of producers, holding other factors constant, decreases the supply for a good.