Be Careful! Change in Demand vs. Change in Quantity Demand You can not have both an: Increase in demand and an increase in quantity demanded or Increase in supply and an increase in quantity supplied The same is true for a decrease….

Change in Demand Increase in Demand Price Decrease in Demand D1 Qty Curves only shift when a determinant changes (TIPSEN or TINE TP) D1 Qty T-Shirts

Change in Quantity Demanded Price Ice Cream makers raise prices to 200 leads to B $2.00 movement along existing demand curve Called a Change in Quantity Demanded A 1.00 D 4 8 Quantity Ice Cream

Test: How would you describe the change: Price S1 P2 ------------------- E2 P1 -------------- E1 ------------------ ------------- D2 D1 Q1 Q2 Qty Soda

Summary ONLY when a determinant of demand or determinant of supply changes can you have a: Increase or decrease in demand [TIPSEN] Increase or decrease in supply [TINE & TP] When price only changes There is a change in quantity demanded [only price]