Related goods are classified as either substitutes or complements. Substitutes are goods that satisfy a similar need or desire. An increase in the price of a good will increase demand for its substitute, while a decrease in the price of a good will decrease demand for its substitute. Complements are goods that are used jointly. An increase in the price of a good will decrease demand for its complement while a decrease in the price of a good will increase demand for its complement.
Income is another factor that can affect demand.
If a good is a normal good, increases in income will result in an increase in demand while decreases in income will decrease demand. If a good is an inferior good, increases in income will result in a decreasein demand while decreases in income will increase demand. C. Other Supply Factors 1. Changes in other supply factors will result in a change in supply. An increase in supply is depicted as a rightward shift of the supply curve.