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2. The Demand Curve Shifts4
Section 2
The Demand Curve Shifts
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3. When Demand Changes, the Curve Shifts
Demand can change.
Increase = shift to the right
Decrease = shift to the left
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4. Exhibit 4-3 from the Student Text
In the graph, the demand curve in the middle, the one labeled D1, is the starting point.
On this curve, what is the quantity demanded at a price of $1?
(Answer: Four hundred quarts of orange juice.)
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5. What Factors Cause Demand Curves to Shift?
Five factors cause demand curves to shift:
Income. As a person’s income changes, he or she may buy more or less of a certain good.
Normal good
Inferior good
Preferences. Changes in preferences cause changes in demand.
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6. What Factors Cause Demand Curves to Shift? (cont.)
Prices of related goods.
Substitute goods: replacements.
Complements are goods used together.
Number of buyers
Expectations (6 months to 1 year)
Good times
Bad times
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7. What Factor Causes a Change in Quantity Demanded?
Quantity demanded = price.
Remember: Demand and quantity demanded are not the same thing.
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