A Level Economics AQA Practice Exam

Which of the following is NOT considered a factor of demand?

1. Population

2. Income

3. Corporate profits

4. Tastes and Preferences

The correct answer is: Corporate profits

In economics, demand for a good or service is influenced by several key factors, commonly referred to as the determinants of demand. These include population, income, and consumer tastes and preferences, all of which directly affect how much of a product consumers are willing and able to purchase. Population affects demand because the larger the population, the greater the number of potential buyers, potentially increasing overall demand. Income plays a crucial role as well; as consumers’ income rises, they generally have more purchasing power, which can lead to higher demand for various goods and services. Tastes and preferences are essential as they reflect consumer preferences that can shift demand for products based on trends, advertising, and social influences. Corporate profits, while significant in the context of business operations and investment decisions, do not directly influence consumer demand for goods and services. Instead, they relate more to supply-side economics and can affect production decisions, pricing strategies, and company growth, but they are not considered a factor of demand. Thus, corporate profits do not fit the classification of determinants of demand, making it the correct choice in this context.