Introduction

In this section, we consider the impact of a change in tastes and preferences on the demand for a good or service.

After you have worked through this section of the learning unit, you should be able to:

  • describe what happens to the demand schedule if tastes and preferences change

What happens when the tastes and preferences of households change? Our attitude towards goods and services is determined by our tastes and preferences. We like some goods more than others.

What do you think would happen to the Dlamini family’s demand for fried chicken pieces if Mr Dlamini, acting on the advice of his doctor, decides to buy less fried chicken per week? How would this affect the demand schedule for fried chicken pieces?

This would cause...




If people's tastes and preferences change, the demand for the good and service will change, and at each price a different quantity will be demanded than before.

A lower preference for a good or service means less of the good will be demanded at each price, and the position of the demand curve will shift to the left.

Study the demand schedule to see how a decrease in tastes and preferences will affect the demand for fried chicken pieces.

Demand and change in preferences

Price of fried chicken per piece (rand) Quantity of fried chicken pieces demanded (per week) Quantity of fried chicken pieces demanded after the change in preferences (per week)
7 12 6
6 18 12
5 24 18
4 30 24
3 36 30
2 42 36
1 48 42

Can you see how at each price, the quantity demanded for fried chicken pieces is now lower? At a price of R7, the quantity demanded is six pieces instead of 12; at a price of R6, the quantity demanded is 12 pieces instead of 18; at a price of R5, the quantity demanded is 18 pieces instead of 24; and so on.

There is now a lower demand for fried chicken pieces because at each price, a smaller quantity is demanded than before.