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Decrease in Demand

Definition

A decrease in demand refers to a situation where consumers desire less of a good or service at every price level, leading to a leftward shift of the demand curve. It can be caused by factors such as changes in consumer preferences or income.

Analogy

Think of your favorite trendy clothing brand suddenly falling out of fashion and losing popularity. The decrease in demand is like fewer people wanting to buy their clothes, causing the brand's sales to decline.

Related terms

Substitute Goods: Substitute goods are products that can be used as alternatives for each other. If the price of one substitute decreases, it may cause a decrease in demand for another.

Complementary Goods: Complementary goods are products that are typically consumed together. If the price of one complementary good increases, it may cause a decrease in demand for the other.

Shift in Supply: A shift in supply refers to changes in factors affecting supply (such as input costs or technology), resulting in an entire movement of the supply curve either leftward (decrease) or rightward (increase).