Demand: Factors affecting Demand (Price, Income, etc.)

AQA

GCSE

Analysis of the functional relationship between price and quantity demanded, underpinned by the Law of Demand and the assumption of ceteris paribus. Study necessitates a rigorous distinction between movements along the demand curve (caused exclusively by price changes) and shifts of the curve (caused by non-price determinants such as real income, tastes, and prices of related goods). Mastery requires application of utility theory, specifically the Law of Diminishing Marginal Utility, to explain the downward slope of the demand curve.

Objectives

Exam Tips

Pitfalls

Key Terms

Mark Points

What You Need to Demonstrate

Key skills and knowledge for this topic

Award marks for precise definition of the Law of Demand: the inverse relationship between price and quantity demanded.
Credit responses that explicitly distinguish between a 'change in quantity demanded' (movement) and a 'change in demand' (shift).
Candidates must analyse the specific impact of non-price factors: Income (Normal vs Inferior), Tastes, Substitutes, Complements, Advertising, and Population.
Award highest levels for the integration of fully labelled, accurate supply and demand diagrams that visually represent the written analysis.

Marking Points

Key points examiners look for in your answers

Award marks for precise definition of the Law of Demand: the inverse relationship between price and quantity demanded.
Credit responses that explicitly distinguish between a 'change in quantity demanded' (movement) and a 'change in demand' (shift).
Candidates must analyse the specific impact of non-price factors: Income (Normal vs Inferior), Tastes, Substitutes, Complements, Advertising, and Population.
Award highest levels for the integration of fully labelled, accurate supply and demand diagrams that visually represent the written analysis.

Examiner Tips

Expert advice for maximising your marks

💡Always use a ruler to draw diagrams and clearly label the new equilibrium points (e.g., P1, Q1 to P2, Q2).
💡For 'Explain' questions, construct a logical chain of reasoning: Factor -> Shift Direction -> Impact on Price -> Impact on Quantity.
💡In 15-mark questions, the conclusion must weigh the magnitude of the factors or consider the time lag involved.
💡Use the acronym PASIFIC (Population, Advertising, Substitutes, Income, Fashion, Interest rates, Complements) to recall shift factors.

Common Mistakes

Pitfalls to avoid in your exam answers

Confusing a movement along the curve (caused by price change) with a shift of the curve (caused by non-price factors).
Incorrectly labelling axes on diagrams (e.g., swapping Price and Quantity or omitting labels entirely).
Stating that a change in price causes a change in 'demand' rather than a change in 'quantity demanded'.
Confusing Normal and Inferior goods when analysing the impact of income changes.

Key Terminology

Essential terms to know

Likely Command Words

How questions on this topic are typically asked

Define

Calculate

Explain

Analyse

Assess

Evaluate

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