Q.Explain the main determinants of demand other than the good's own price.

Besides its own price, the demand for a good depends on several other forces captured in the demand function.

Apart from own price, the chief determinants of demand are:

• Prices of related goods. For substitutes (tea and coffee), a rise in the price of one increases demand for the other. For complements (car and petrol, pen and ink), a rise in the price of one decreases demand for the other.
• Income of the consumer. For normal goods, demand rises as income rises. For inferior goods (coarse grain, low-grade cloth), demand falls as income rises because the buyer switches to better substitutes.
• Tastes, habits and fashion. A good in fashion, or one strongly advertised, enjoys higher demand; one that goes out of style loses demand even at an unchanged price.
• Expectations of future prices. If buyers expect the price to rise soon, present demand rises as they stock up; if they expect a fall, present demand drops.
• Number of buyers / size of the market. A larger population or a new group of buyers entering the market raises total (market) demand.

A change in any of these — with own price unchanged — shifts the whole demand curve (a change in demand), as distinct from a movement along it caused by an own-price change.

Listing own price among the 'other' determinants; reversing the substitute/complement effects; forgetting that these factors shift the curve rather than move a point along it.