[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:12.50,0:00:16.30,Default,,0000,0000,0000,,In previous videos, we've covered\Nthe basics of the demand curve.
Dialogue: 0,0:00:16.30,0:00:19.70,Default,,0000,0000,0000,,Now let's discuss what happens\Nwhen the demand curve shifts
Dialogue: 0,0:00:20.00,0:00:23.03,Default,,0000,0000,0000,,due to increases or decreases\Nin market demand.
Dialogue: 0,0:00:23.03,0:00:26.10,Default,,0000,0000,0000,,First, let's look at\Nan increase in demand.
Dialogue: 0,0:00:26.70,0:00:28.06,Default,,0000,0000,0000,,An increase in demand
Dialogue: 0,0:00:28.06,0:00:31.60,Default,,0000,0000,0000,,means that the demand curve\Nshifts up and to the right.
Dialogue: 0,0:00:32.40,0:00:35.25,Default,,0000,0000,0000,,Take the market\Nfor house plants, for instance.
Dialogue: 0,0:00:35.25,0:00:38.10,Default,,0000,0000,0000,,On the old demand curve at $20,
Dialogue: 0,0:00:38.40,0:00:41.57,Default,,0000,0000,0000,,the quantity demanded\Nwas five plants,
Dialogue: 0,0:00:41.57,0:00:44.99,Default,,0000,0000,0000,,but on the new demand curve\Nat, again, $20,
Dialogue: 0,0:00:44.99,0:00:47.41,Default,,0000,0000,0000,,the quantity demanded\Nis eight plants.
Dialogue: 0,0:00:48.50,0:00:52.20,Default,,0000,0000,0000,,At $16, we go from six plants\Nto nine plants.
Dialogue: 0,0:00:53.50,0:00:57.50,Default,,0000,0000,0000,,At $12, we go from seven\Nto ten plants, and so on.
Dialogue: 0,0:00:57.90,0:01:02.40,Default,,0000,0000,0000,,An increase in demand is a greater\Nquantity demanded at every price.
Dialogue: 0,0:01:03.00,0:01:05.30,Default,,0000,0000,0000,,We can also read\Nan increase in demand
Dialogue: 0,0:01:05.30,0:01:07.80,Default,,0000,0000,0000,,using what is called\Nthe vertical method.
Dialogue: 0,0:01:08.00,0:01:10.10,Default,,0000,0000,0000,,What that means\Nis that for every quantity,
Dialogue: 0,0:01:10.30,0:01:13.20,Default,,0000,0000,0000,,there's a greater willingness\Nto pay for that quantity.
Dialogue: 0,0:01:13.50,0:01:15.63,Default,,0000,0000,0000,,For instance, for the fifth unit,
Dialogue: 0,0:01:15.63,0:01:19.10,Default,,0000,0000,0000,,people had been willing\Nto pay $20 for that unit.
Dialogue: 0,0:01:19.30,0:01:20.99,Default,,0000,0000,0000,,Now with the new demand curve,
Dialogue: 0,0:01:20.99,0:01:24.39,Default,,0000,0000,0000,,people are willing to pay\N$32 for that unit.
Dialogue: 0,0:01:25.10,0:01:27.50,Default,,0000,0000,0000,,In summary, an increase in demand
Dialogue: 0,0:01:27.50,0:01:30.14,Default,,0000,0000,0000,,means an increase\Nin the quantity demanded
Dialogue: 0,0:01:30.14,0:01:32.15,Default,,0000,0000,0000,,at every market price,
Dialogue: 0,0:01:32.15,0:01:34.76,Default,,0000,0000,0000,,or equivalently, \Nit means an increase
Dialogue: 0,0:01:34.76,0:01:38.27,Default,,0000,0000,0000,,in the maximum willingness\Nto pay for a given quantity.
Dialogue: 0,0:01:39.40,0:01:40.70,Default,,0000,0000,0000,,A decrease in demand.
Dialogue: 0,0:01:40.80,0:01:44.90,Default,,0000,0000,0000,,Well, that's just the opposite of an\Nincrease in demand. It's a shift down
Dialogue: 0,0:01:45.00,0:01:46.00,Default,,0000,0000,0000,,and to the left.
Dialogue: 0,0:01:46.60,0:01:52.10,Default,,0000,0000,0000,,There is a decrease in quantity\Ndemanded at every price now at $20,
Dialogue: 0,0:01:52.30,0:01:55.20,Default,,0000,0000,0000,,people only want to buy two houseplants
Dialogue: 0,0:01:56.10,0:02:00.30,Default,,0000,0000,0000,,at $16. We go from six to\Nthree house plants and so on.
Dialogue: 0,0:02:01.10,0:02:06.40,Default,,0000,0000,0000,,Similarly, this means a decrease in the\Nwillingness to pay for the same quantity
Dialogue: 0,0:02:06.80,0:02:09.10,Default,,0000,0000,0000,,for the fifth unit people were willing to
Dialogue: 0,0:02:09.20,0:02:11.20,Default,,0000,0000,0000,,I pay $20 for that unit
Dialogue: 0,0:02:11.30,0:02:14.90,Default,,0000,0000,0000,,but now they're only going to Fork\Nover eight dollars for that house plan.
Dialogue: 0,0:02:16.50,0:02:19.40,Default,,0000,0000,0000,,So what can cause a shift in demand?
Dialogue: 0,0:02:20.00,0:02:24.10,Default,,0000,0000,0000,,What would make consumers, buy more\Nor less of a good at every price.
Dialogue: 0,0:02:24.80,0:02:32.00,Default,,0000,0000,0000,,Take a moment to jot down. Some guesses\Nwill go through these with a few examples,
Dialogue: 0,0:02:32.10,0:02:34.90,Default,,0000,0000,0000,,but the real goal is not\Nto memorize this list.
Dialogue: 0,0:02:35.20,0:02:39.60,Default,,0000,0000,0000,,But rather to understand what an\Nincrease or decrease in demand means,
Dialogue: 0,0:02:39.90,0:02:42.50,Default,,0000,0000,0000,,so that you can recreate\Nthis list on your own.
Dialogue: 0,0:02:43.00,0:02:46.20,Default,,0000,0000,0000,,Let's now go through five\Nfactors. That can increase
Dialogue: 0,0:02:46.30,0:02:50.90,Default,,0000,0000,0000,,Decrease market demand\Nnamely income population,
Dialogue: 0,0:02:51.00,0:02:53.60,Default,,0000,0000,0000,,tastes the price of related goods.
Dialogue: 0,0:02:53.70,0:02:55.60,Default,,0000,0000,0000,,And finally expectations.
Dialogue: 0,0:02:56.60,0:02:58.90,Default,,0000,0000,0000,,Let's start with changes in income,
Dialogue: 0,0:02:59.50,0:03:02.30,Default,,0000,0000,0000,,the effect of a change\Nin income on demand,
Dialogue: 0,0:03:02.40,0:03:07.80,Default,,0000,0000,0000,,depends on the nature of the good in question\Nfor most Goods as your income goes up.
Dialogue: 0,0:03:07.90,0:03:11.00,Default,,0000,0000,0000,,You demand more of the\Ngood think, for instance,
Dialogue: 0,0:03:11.10,0:03:14.00,Default,,0000,0000,0000,,fine. Dining you need to be\Nable to afford it, right.
Dialogue: 0,0:03:14.80,0:03:20.40,Default,,0000,0000,0000,,The demand curve then shifts up and to the\Nright these goods are called normal Goods
Dialogue: 0,0:03:20.80,0:03:23.90,Default,,0000,0000,0000,,because the demand for them\Ngoes up when incomes go up
Dialogue: 0,0:03:23.90,0:03:26.30,Default,,0000,0000,0000,,and indeed most goods\Nare normal Goods, that's
Dialogue: 0,0:03:26.50,0:03:27.80,Default,,0000,0000,0000,,Why we call them normal?
Dialogue: 0,0:03:28.30,0:03:33.70,Default,,0000,0000,0000,,And the same Goods. The demand for\Nthem goes down when incomes go down.
Dialogue: 0,0:03:34.90,0:03:36.40,Default,,0000,0000,0000,,There are also Goods. However,
Dialogue: 0,0:03:36.70,0:03:41.20,Default,,0000,0000,0000,,for which, when your income goes up,\Nyour demand for them actually goes down.
Dialogue: 0,0:03:41.70,0:03:44.80,Default,,0000,0000,0000,,These are exceptions. We\Ncall them inferior Goods.
Dialogue: 0,0:03:45.20,0:03:51.10,Default,,0000,0000,0000,,So, an example of such an inferior, good\Nmight be instant Ramen, it's very cheap.
Dialogue: 0,0:03:52.00,0:03:54.50,Default,,0000,0000,0000,,As you make more money,\Nyou might buy, say,
Dialogue: 0,0:03:54.60,0:03:59.00,Default,,0000,0000,0000,,more caviar, more steak,\Nand less instant Ramen.
Dialogue: 0,0:03:59.70,0:04:04.60,Default,,0000,0000,0000,,Thus, the demand curve for instant\NRamen will shift down into the left, as
Dialogue: 0,0:04:04.60,0:04:06.00,Default,,0000,0000,0000,,Your income increases.
Dialogue: 0,0:04:06.80,0:04:13.40,Default,,0000,0000,0000,,Now let's move on to changes in population\Nas the population of an economy changes.
Dialogue: 0,0:04:13.70,0:04:15.70,Default,,0000,0000,0000,,The number of potential buyers
Dialogue: 0,0:04:15.80,0:04:21.00,Default,,0000,0000,0000,,of a good changes. Also what would\Nhappen to the demand for hearing aids?
Dialogue: 0,0:04:21.10,0:04:24.40,Default,,0000,0000,0000,,If the elderly population\Nin your country increased?
Dialogue: 0,0:04:24.60,0:04:27.90,Default,,0000,0000,0000,,Well very likely demand for\Nhearing aids would increase
Dialogue: 0,0:04:28.30,0:04:33.10,Default,,0000,0000,0000,,at any price for those hearing aids,\Nthere would be a higher quantity demanded
Dialogue: 0,0:04:38.90,0:04:41.60,Default,,0000,0000,0000,,Can you think of a good that\Nwould decrease in demand
Dialogue: 0,0:04:41.70,0:04:44.00,Default,,0000,0000,0000,,if the birth rates in\Nyour country decreased?
Dialogue: 0,0:04:45.20,0:04:48.00,Default,,0000,0000,0000,,Now, we'll move on to changes in tastes.
Dialogue: 0,0:04:48.30,0:04:51.10,Default,,0000,0000,0000,,Tastes are subjective and\Nthey're changing all the time.
Dialogue: 0,0:04:51.40,0:04:57.30,Default,,0000,0000,0000,,New information Fashions and fads all\Ncan impact tastes to give an example.
Dialogue: 0,0:04:57.70,0:05:00.00,Default,,0000,0000,0000,,What happens to the demand for hamburgers?
Dialogue: 0,0:05:00.00,0:05:05.60,Default,,0000,0000,0000,,If low-carb diet, like the keto diet or\Nthe caveman diet become more popular?
Dialogue: 0,0:05:06.20,0:05:10.10,Default,,0000,0000,0000,,Well, people would want to go out\Nand buy and eat more hamburgers.
Dialogue: 0,0:05:10.20,0:05:13.40,Default,,0000,0000,0000,,And so, the demand for\Nhamburgers would increase
Dialogue: 0,0:05:15.00,0:05:15.30,Default,,0000,0000,0000,,Lee,
Dialogue: 0,0:05:15.60,0:05:20.60,Default,,0000,0000,0000,,what if a controversy surfaced that\Nquestioned the ethics of hamburger production?
Dialogue: 0,0:05:21.10,0:05:23.90,Default,,0000,0000,0000,,People might then feel bad\Nabout buying hamburgers
Dialogue: 0,0:05:24.10,0:05:28.40,Default,,0000,0000,0000,,and then they would buy fewer hamburgers\Nor maybe stop buying them all together.
Dialogue: 0,0:05:28.90,0:05:31.90,Default,,0000,0000,0000,,The demand for hamburgers\Nthen would go down.
Dialogue: 0,0:05:33.30,0:05:33.80,Default,,0000,0000,0000,,Next,
Dialogue: 0,0:05:34.30,0:05:39.50,Default,,0000,0000,0000,,let's consider how the price of a related\Ngood can affect demand starting with
Dialogue: 0,0:05:39.80,0:05:40.90,Default,,0000,0000,0000,,substitute Goods.
Dialogue: 0,0:05:41.50,0:05:43.40,Default,,0000,0000,0000,,Now substitutes are two goods
Dialogue: 0,0:05:43.70,0:05:47.70,Default,,0000,0000,0000,,that are roughly interchangeable. They're\Nnot the same but they can serve broadly,
Dialogue: 0,0:05:47.80,0:05:51.50,Default,,0000,0000,0000,,similar functions. Take for\Ninstance, hot dogs and hamburgers.
Dialogue: 0,0:05:51.80,0:05:54.00,Default,,0000,0000,0000,,They're both something\Nyou might have for dinner.
Dialogue: 0,0:05:54.50,0:05:58.00,Default,,0000,0000,0000,,Now in the setting suppose\Nthe price of hot dogs goes up.
Dialogue: 0,0:05:58.50,0:06:02.40,Default,,0000,0000,0000,,What happens to the demand for\Nhamburgers. A substitute for hot dogs.
Dialogue: 0,0:06:03.10,0:06:08.90,Default,,0000,0000,0000,,People will opt to buy the relatively less\Nexpensive hamburgers instead of the now.
Dialogue: 0,0:06:09.00,0:06:10.70,Default,,0000,0000,0000,,More expensive Hot Dogs.
Dialogue: 0,0:06:13.10,0:06:15.90,Default,,0000,0000,0000,,That means the demand\Nfor hamburgers increases.
Dialogue: 0,0:06:17.00,0:06:19.20,Default,,0000,0000,0000,,Or consider the opposite. Occurrence.
Dialogue: 0,0:06:19.70,0:06:24.70,Default,,0000,0000,0000,,What if the price of hot dogs decreases\Ninstead of going up? What happens then
Dialogue: 0,0:06:24.80,0:06:29.30,Default,,0000,0000,0000,,to the demand for hamburgers? Well, that's\Njust the opposite of the first scenario.
Dialogue: 0,0:06:29.50,0:06:33.80,Default,,0000,0000,0000,,Hot dogs are now cheaper and the\Ndemand for hamburgers decreases
Dialogue: 0,0:06:33.90,0:06:37.10,Default,,0000,0000,0000,,because it now costs less\Nto buy hot dogs instead.
Dialogue: 0,0:06:38.00,0:06:40.50,Default,,0000,0000,0000,,Technically, two goods are substitutes.
Dialogue: 0,0:06:40.60,0:06:42.40,Default,,0000,0000,0000,,If an increase in the price of one,
Dialogue: 0,0:06:42.40,0:06:47.00,Default,,0000,0000,0000,,good leads to an increase in demand\Nfor the other, good and vice versa.
Dialogue: 0,0:06:48.30,0:06:52.20,Default,,0000,0000,0000,,Another kind of related good is\Nwhat economists, call compliments,
Dialogue: 0,0:06:52.70,0:06:54.10,Default,,0000,0000,0000,,Compliments are two goods
Dialogue: 0,0:06:54.20,0:06:57.80,Default,,0000,0000,0000,,which are often used together and\Nmake each other more valuable,
Dialogue: 0,0:06:58.30,0:07:01.00,Default,,0000,0000,0000,,suppose the price of hamburgers increases,
Dialogue: 0,0:07:01.60,0:07:04.60,Default,,0000,0000,0000,,what happens to the\Ndemand for hamburger buns.
Dialogue: 0,0:07:04.80,0:07:07.10,Default,,0000,0000,0000,,We complement to hamburgers proper.
Dialogue: 0,0:07:07.90,0:07:10.60,Default,,0000,0000,0000,,Well, fewer, people will buy hamburgers
Dialogue: 0,0:07:11.00,0:07:14.00,Default,,0000,0000,0000,,and so fewer. People\Nwill buy hamburger buns,
Dialogue: 0,0:07:14.30,0:07:17.70,Default,,0000,0000,0000,,the demand for hamburger buns, decreases.
Dialogue: 0,0:07:18.60,0:07:21.20,Default,,0000,0000,0000,,And to consider the opposite situation.
Dialogue: 0,0:07:21.50,0:07:26.60,Default,,0000,0000,0000,,If the price of hamburger decreases\Ndemand for hamburger buns, will increase.
Dialogue: 0,0:07:27.00,0:07:28.30,Default,,0000,0000,0000,,That is more people.
Dialogue: 0,0:07:28.30,0:07:32.80,Default,,0000,0000,0000,,Buying hamburger means, more people, buying\Nhamburger buns as well because again,
Dialogue: 0,0:07:32.80,0:07:35.20,Default,,0000,0000,0000,,you're putting the hamburger\Nand the bun together.
Dialogue: 0,0:07:35.80,0:07:38.10,Default,,0000,0000,0000,,Technically, two goods are complements.
Dialogue: 0,0:07:38.30,0:07:40.50,Default,,0000,0000,0000,,If an increase in the price of one, good
Dialogue: 0,0:07:40.60,0:07:44.60,Default,,0000,0000,0000,,leads to a decrease in the demand\Nfor the other and vice versa.
Dialogue: 0,0:07:45.40,0:07:47.50,Default,,0000,0000,0000,,So in some hamburger producers,
Dialogue: 0,0:07:47.60,0:07:49.60,Default,,0000,0000,0000,,want the price of hot dogs to go up
Dialogue: 0,0:07:49.90,0:07:54.60,Default,,0000,0000,0000,,the price of hamburger buns to go\Ndown and low carb diets to go viral.
Dialogue: 0,0:07:54.90,0:07:57.40,Default,,0000,0000,0000,,Finally, let's look at expectations.
Dialogue: 0,0:07:57.80,0:08:01.80,Default,,0000,0000,0000,,These can be expectations of\Nmarket prices, or of Market events.
Dialogue: 0,0:08:02.00,0:08:04.00,Default,,0000,0000,0000,,Consider video game consoles.
Dialogue: 0,0:08:04.50,0:08:08.10,Default,,0000,0000,0000,,If it's November and people expect\Nthe price of the gaming console,
Dialogue: 0,0:08:08.30,0:08:11.00,Default,,0000,0000,0000,,to go down and a December holiday sale.
Dialogue: 0,0:08:11.40,0:08:14.30,Default,,0000,0000,0000,,They might wait a few weeks\Nbefore buying the console
Dialogue: 0,0:08:15.00,0:08:20.30,Default,,0000,0000,0000,,demand for that console decreases today\Nbecause it's going to increase later on
Dialogue: 0,0:08:21.20,0:08:22.60,Default,,0000,0000,0000,,or take batteries.
Dialogue: 0,0:08:22.90,0:08:26.10,Default,,0000,0000,0000,,Suppose you here, there's going\Nto be a big hurricane in your area
Dialogue: 0,0:08:26.80,0:08:28.00,Default,,0000,0000,0000,,if a hurricane hits.
Dialogue: 0,0:08:28.20,0:08:31.40,Default,,0000,0000,0000,,You might expect the price of\Nbatteries is going to go up
Dialogue: 0,0:08:31.60,0:08:34.80,Default,,0000,0000,0000,,or maybe it will be really hard\Nto get any batteries at all.
Dialogue: 0,0:08:34.90,0:08:38.40,Default,,0000,0000,0000,,Oh no. That means a higher\Ndemand for Batteries today.
Dialogue: 0,0:08:38.60,0:08:41.90,Default,,0000,0000,0000,,And so, the expectation of this\Nfuture event of the hurricane
Dialogue: 0,0:08:42.00,0:08:44.70,Default,,0000,0000,0000,,can change the demand for Batteries today.
Dialogue: 0,0:08:45.60,0:08:49.10,Default,,0000,0000,0000,,If people expect the price of a\Ngood to be higher in the future,
Dialogue: 0,0:08:49.60,0:08:52.30,Default,,0000,0000,0000,,that typically increases demand today,
Dialogue: 0,0:08:52.70,0:08:56.90,Default,,0000,0000,0000,,consumers adjust their current\Nspending anticipating the future prices
Dialogue: 0,0:08:57.10,0:09:01.90,Default,,0000,0000,0000,,to obtain the lowest price possible\Nand that's it for our list of shifters.
Dialogue: 0,0:09:02.70,0:09:05.60,Default,,0000,0000,0000,,Now that you understand what\Na shift in demand means,
Dialogue: 0,0:09:05.80,0:09:09.10,Default,,0000,0000,0000,,practice recreating this\Nlist of shifters on your own.
Dialogue: 0,0:09:09.90,0:09:13.30,Default,,0000,0000,0000,,What would cause a higher\Nquantity demanded at every price
Dialogue: 0,0:09:13.60,0:09:15.20,Default,,0000,0000,0000,,more people, wealthier people?
Dialogue: 0,0:09:15.40,0:09:17.80,Default,,0000,0000,0000,,Well, it's the hotter in item and so on.
Dialogue: 0,0:09:18.40,0:09:23.50,Default,,0000,0000,0000,,Conversely. What would cause less of\Na good to be demanded at every price?
Dialogue: 0,0:09:24.10,0:09:28.00,Default,,0000,0000,0000,,Once you can do that, you'll be\Nable to identify demand shifters
Dialogue: 0,0:09:28.20,0:09:31.00,Default,,0000,0000,0000,,without the need to memorize any list.
Dialogue: 0,0:09:33.40,0:09:34.30,Default,,0000,0000,0000,,If you're a teacher,
Dialogue: 0,0:09:34.30,0:09:38.10,Default,,0000,0000,0000,,you should check out our supply and demand\Nunit plan that incorporates this video.
Dialogue: 0,0:09:38.40,0:09:39.30,Default,,0000,0000,0000,,If you're a learner,
Dialogue: 0,0:09:39.40,0:09:43.20,Default,,0000,0000,0000,,make sure this video sticks by answering\Na few quick, practice questions,
Dialogue: 0,0:09:43.60,0:09:47.20,Default,,0000,0000,0000,,or if you're ready for more\Nmicroeconomics, click for the next video,