So a factor that could cause demand to shift for a product is the income of the consumer. Let's check it out. As a consumer's income changes, the types of goods that they buy are also going to change. So let's think about when you're living back at mom's house, right? You come home, have a nice steak dinner, and go to bed in a nice queen-size bed. Life was good. And now you're in a dorm room. What do you get here? Ramen noodles every night, and I'm assuming this is what I picture you as. I'm assuming you're all just, like, sharing bunk beds with strangers right now. Kind of a downgrade from mom's house, but you'll see that the types of goods here are different. At mom's house, we could say that things were a little better. So let's go ahead and define what those are. We'll say that people buy more of what are called normal goods when they have more money, and just the opposite, people buy more inferior goods when they have less money. So you can kind of follow the logic here, right? Normal goods could be things like what you had at mom's house, or what I've listed here we've got organic food, new furniture, or even going on vacation we could count as a normal good. When we compare it to these inferior goods like buying canned soup or buying used furniture off Craigslist or a staycation where you just take your days off and stay home because you've got no money. Cool, so that's the idea here. We're going to have our normal goods and our inferior goods and when we think of the consumer income, if that changes, we gotta think is our product a normal good or an inferior good and how is this income change going to affect the demand for the product. I've got an example coming up, let's try it out.
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3. The Market Forces of Supply and Demand
Shifts in the Demand Curve
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