Abdullah Azari, 43283365

Recap & Remind
An increase in Demand refers to non-price factors that cause the demand curve to shift outwards e.g. income, prices of related goods, population and etc. When a persons income increases they want more a good, they don’t care about the price. An increase in the quantity demanded refers to price changes, which then causes a movement along the curve. If a product becomes cheaper then the quantity demanded increases. This distinction is important because one must understand what factors affect the demand curve to shift outwards i.e. non-price changes or external factors, and what causes a movement along the curve i.e. a change in prices.

Economics Everyday

D D D1 S

D1

S D Q Q Q1
Since the Xbox one and its games are complimentary goods and if the price of the Xbox one decreases then the demand for its games will increase from D-D1 and also the quantity demanded will increase from q-q1 as shown. Supply however does not change.

D D S

D1

S D1 D Q Q1 Q
Since the PS4 and the Wii U are substitute goods for the Xbox one, if their price decreases then so will the demand for the Xbox one and as result the demand and the quantity