Changes in the Demand Environment

Factor: Complements


The product being used are toothbrushes. When there is an increase in demand for toothbrushes, there tends to be an increase for toothpaste as well. As you use your toothbrush at least twice a day, the bristles can become frayed or will lose its structure. Toothpaste is also used the same amount as your toothbrush, which can run out quickly depending on how much toothpaste you use per brushing. When companies figure out a way to prevent toothbrushes from losing their shape, the demand will fall. Also, new inventors have come up with a toothpaste dispenser that distributes the same amount of toothpaste every time so young users do not make a mess. With this new invention, the demand for toothpaste will also decline.

Increase for toothbrushes

$	#D (Original)	D1 Increase
$1.00	55	100
$1.50	40	80
$2.00	25	60
$2.50	10	40
$3.00	5	20

Factor: Consumer Income

As items become more expensive, consumers tend to decrease their demand for it. A reason for the decrease in demand has to do with the consumers income. If he/she does not make enough money to keep buying the product, then he/she will have to stop buying so much or stop buying the product altogether. The demand schedules will show how the demand for the product, coffee, will decline when the price goes up.

	$ #D (Original) D1 (Decrease) $1.00 5 4 $3.00 4 2 $5.00 3 1 $7.00 2 0 $9.00 1 0