Regarding a hypothetical recent purchase, what is an example of a scenario that would cause a change in demand versus a movement along the same demand curve and supply curve for this product?

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pohnpei397 eNotes educator| Certified Educator

Not long ago, I bought a Kindle for my daughter for Christmas.  There are many things that could change the supply and demand (as opposed to simply moving supply or demand along the same curve) for this product.  Let us look at a few of these things.

One thing that could change the demand for Kindles would be the price of complementary goods.  The main good that we use with a Kindle is the e-book.  A decline in the price of e-books would make people more likely to buy a Kindle on which to read the e-books.  Another thing that could change demand would be a change in the price of a substitute such as a Nook.  If the price of the Nook drops relative to that of a Kindle, people might be more likely to buy the Nook.

Changes in supply typically come about because of changes in the prices of inputs.  Thus, one major factor that could change the supply of Kindles would be a change in technology that would allow Amazon to make the Kindles more quickly and cheaply.  This would increase supply.  Another possible factor that could increase supply would be a drop in the price of the materials that go into a Kindle.