IBonomicsShift of the Demand CurveSL
MicroeconomicsA diagram showing how the whole demand curve can shift to the right or left when a non-price determinant of demand changes.
Curves and elements
- D
- The original demand curve, showing the relationship between price and quantity demanded.
- D1
- An increase in demand: a rightward shift from D, meaning more is demanded at every price.
- D2
- A decrease in demand: a leftward shift from D, meaning less is demanded at every price.
- Non-price determinants
- Factors other than the good’s own price that can shift the demand curve.
Key explanations
- 1
A shift of the demand curve occurs when quantity demanded changes at every price level.
- 2
An increase in demand shifts the demand curve to the right, from D to D1.
- 3
A decrease in demand shifts the demand curve to the left, from D to D2.
- 4
Demand can shift due to factors such as income, tastes, advertising, population, expectations, or the prices of related goods.
Example exam question
Explain how an increase in consumer income would affect the demand curve for a normal good.
Show example answer
An increase in consumer income would increase demand for a normal good, shifting the demand curve to the right from D to D1, all things being equal.
