Summing Up Factors That Change Demand
How do you feel now about the egg question/challenge posed at the
beginning of this unit? Make sure you can graph demand shifts. Figure
3.9 summarizes the factors that can change demand and shift demand
curves. Read the section. Review changes to demand when the product
price does not change.
Figure 3.9 summarizes six factors that can shift demand curves. The direction of the arrows indicates whether the demand curve shifts represent an increase in demand or a decrease in demand. Notice that a change in the price of the good or service itself is not listed among the factors that can shift a demand curve. A change in the price of a good or service causes a movement along a specific demand curve, and it typically leads to some change in the quantity demanded, but it does not shift the demand curve.
Figure 3.9 Factors That Shift Demand Curves (a) A list of factors that can cause an increase in demand from D0 to D1. (b) The same factors, if their direction is reversed, can cause a decrease in demand from D0 to D1.
When a demand curve shifts, it will then intersect with a given supply curve at a different equilibrium price and quantity. We are, however, getting ahead of our story. Before discussing how changes in demand can affect equilibrium price and quantity, we first need to discuss shifts in supply curves.
Source: OpenStax, https://openstax.org/books/principles-microeconomics-3e/pages/3-2-shifts-in-demand-and-supply-for-goods-and-services
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