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NotesEconomics HLTopic 2.1Determinants of demand
Back to Economics HL Topics
2.1.29 min read

Determinants of demand (Economics HL)

IB Economics · Unit 2

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Contents

  1. 1What shifts the demand curve
  2. 2Five things that shift demand
  3. 3Drawing it in the exam
  4. 4Exam-style question

Take a city cinema on a Friday evening. Two different things can happen.

Scenario 1: the price changes

1

The price changes

Only the ticket price changes. Nothing else.

Price change
2

Buyers move along D

They want fewer tickets on the same curve D.

Along D

Our example (made-up numbers)

Ticket priceTickets wanted per evening
€820
€640
€460

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Scenario 2: something else changes

1

A big film comes out

The price stays at €6. Everyone wants to see the new film.

Not the price
2

The whole curve shifts

More tickets are wanted at every price: D1 moves right to D2.

Shift right

Our example (made-up numbers)

Ticket priceTickets wanted beforeTickets wanted after (the big film)
€64070
€46090

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Remember it as: Own price slides you along; everything else shifts the line.

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Five things other than the price shift the whole demand curve. Here they are for a cinema.

What shifts the demand for cinema tickets

1

Income rises

Workers get a pay rise, so they can afford more evenings at the cinema.

Shifts right →
2

Tastes and preferences turn against it

The new film gets poor reviews, so fewer people want to see it.

← Shifts left
3

Prices expected to rise

The cinema says prices rise next month, so people go now, before the rise.

Shifts right →
4

Price of a substitute falls

Streaming gets cheaper, so some people watch films at home instead.

← Shifts left
5

Number of consumers rises

A new housing estate opens nearby, so there are more people to buy tickets.

Shifts right →

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Normal goods (most goods)

  • Income rises: demand rises, D shifts right.
  • Income falls: demand falls, D shifts left.
  • Restaurant meals, new clothes, cinema tickets.

Inferior goods (cheaper options)

  • Income rises: demand falls, D shifts left, as people switch to better goods.
  • Income falls: demand rises, D shifts right.
  • Supermarket own-brand food, bus travel.

The points to remember

  • Each determinant changes how much is wanted at every price.
  • Advertising works through tastes: a big campaign shifts demand right.
  • Always say which way the curve shifts and why buyers want more or less.

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Quick reminder

  • Curves: D1, D2 (to the left) and S
  • Marks: P1, P2, Q1 and Q2
  • Dots with dashed lines to the axes, an arrow for the shift
  • No numbers, no title

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No Higher Level paper has set this micro on its own yet. Standard Level Paper 1 asked it in November 2025, as part (a) for 10 marks; the same question can appear at Higher Level.

IB-style questionExplain[10 marks]

Explain two non-price determinants that could decrease the market demand for a good.

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How the 10 marks are given

MarksWhat your answer needs
9–10Both parts fully explained, terms used correctly all the way through, the diagram included and fully explained
7–8Both parts explained, terms mostly right, the diagram included and explained
5–6Partly explained, some terms, the diagram included
6 at mostOnly one of the two parts answered, however good it is

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between a normal good and an inferior good. [2 marks]

Related Economics HL Topics

Continue learning with these related topics from the same unit:

2.1.1The law of demand2.1.3Substitutes and complements2.1.4Movements vs shifts of demand2.10.1Asymmetric information and market failure
View all Economics HL topics
Improve your exam techniqueCommand terms, paper structure, and mark-scheme tips for Economics HL
Previous2.1.1The law of demandNextSubstitutes and complements2.1.3

17 practice questions on Determinants of demand

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