Final answer:
Changes in income affect demand but not the demand for the price of related products. Instead, the price of substitutes, price of complements, and consumer preferences are the factors that influence this demand. These elements illustrate the substitution and income effects on consumer choices.
Step-by-step explanation:
The demand for the price of related products would not change due to the 'income' of consumers. This is because changes in income affect the demand for the product itself and not the demand related to its price. However, the demand can be affected by factors such as the price of substitutes, price of complements, and consumer preferences.
Consumer choices are affected by income levels, where an increase in income can increase the demand for a normal good, while a decrease can lower it. The prices of related goods like substitutes and complements also play a significant role. If the price of a substitute good rises, consumers might shift their demand to the related good, demonstrating the substitution effect. Conversely, if the price of a complement falls, consumers might purchase more of the related good as the combined price of using both goods is now lower.
Consumer preferences have a direct impact on demand. A taste shift to greater popularity or a change in the demographic composition of a population can lead to an increase in demand. The substitution effect and the income effect explain how consumers respond to changes in prices. The substitution effect occurs when consumers replace a pricier item with a cheaper alternative, while the income effect describes how a change in the price level affects purchasing power, thereby influencing demand.