Explain the factors that cause shift in demand curve.

A shift in the demand curve occurs when a non-price determinant changes, moving the whole curve — a rightward shift means an increase in demand and a leftward shift means a decrease; the main factors causing such shifts are as follows.

1. Income of the consumer: higher income shifts demand rightward for normal goods and leftward for inferior goods.
2. Price of related goods: a rise in the price of a substitute (e.g. Rara noodles when Wai Wai gets costlier) shifts demand rightward, while a rise in a complement's price shifts it leftward.
3. Tastes and preferences: a favourable change in taste or fashion shifts demand rightward, while an unfavourable change shifts it leftward.
4. Size of population: a larger population increases the number of buyers and shifts demand rightward, while a smaller one shifts it leftward.
5. Advertisement: effective advertising raises consumer awareness and desire, shifting demand rightward.
6. Change in money supply: more money in people's hands raises purchasing power and shifts demand rightward.
7. Distribution of national income: a more equal distribution raises overall demand (rightward), while greater inequality shifts it leftward.
8. Expected change in price: if consumers expect prices to rise in future, they buy more now, shifting demand rightward; expecting a fall shifts it leftward.
9. Wealth of the consumer: greater wealth generally raises demand and shifts the curve rightward.
10. Government policy: subsidies and lower taxes raise demand (rightward), while higher taxes reduce it (leftward).

Thus, changes in income, related-good prices, tastes, population, advertising, money supply or expectations shift the entire demand curve, whereas a change in the good's own price merely moves demand along it.