Thursday, January 29, 2009

Consumer Preferences and the Demand Curve

One of the stories that we tell in economics is that demand curves shift when consumer preferences change. Below are some real world examples:

Polariod Film
Here is an example of the shift in the demand curve. Over the last decade, consumers have switched from physical to digital film, and Polariod has announced that it will no longer be producing its instant film. This switch is an example of a leftward shift in the demand for instant (Polariod) film. As consumers switch from instant film to digital film, there is a lower quantity demanded for Polariod film.

Business people are moving away from carrying briefcases. Some of the reasons the article mentions is that many people are using a laptop bag as a briefcase, that technology reduces the need to carry papers, and that many places of business have relaxed their dress codes. Combined these changes in the workplace are changing business people's preferences for a briefcase and shifting the demand curve for briefcases to the left. (On a personal note: when I was at Clarkson and for the first few years at USF I used to carry a briefcase, but have traded the briefcase for a soft case bag. Now at UI, I park about 3/4 of a mile from my office, so I use a small duffle bag to carry my stuff back and forth to work. I also carry a soft case bag to my out of town MBA econ course and my Prin. of Micro course; in case you were wondering.)

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