📉 Change in demand: A shift of the demand curve
🍎 Moving the whole line: Demand shifters for beginners
Imagine you sell lemonade on a hot summer day. When you raise the price from $1.00 to $1.50, your customers buy fewer cups. That’s a change in quantity demanded — a move along the same demand curve. But what if a famous singer moves to your town and everyone suddenly wants lemonade? Now, even at $1.50, people buy more cups than before. The whole curve has shifted right. This is a change in demand. It happens when something other than price changes how much people want your product.
In economics, we draw demand curves on a graph with price on the vertical axis and quantity on the horizontal axis. A rightward shift means more is demanded at each price (demand increases). A leftward shift means less is demanded at each price (demand decreases). Let’s explore the five main reasons the entire curve can move.
🧠 Five engines of the shift: Determinants of demand
When economists say “demand increased,” they mean the whole curve slid to the right. Let’s explore the five factors that cause this slide, with examples that make sense for students.
If you get a higher allowance, you might buy more video games (a normal good). Demand shifts right. But for inferior goods — like instant noodles — more income might make you buy fewer noodles because you can afford restaurant pizza. Demand shifts left.
Substitutes: If the price of coffee rises, people switch to tea. Demand for tea shifts right. Complements: If smartphones become cheaper, more people buy them — and also buy more phone cases. Demand for cases shifts right.
A viral TikTok video makes crocs cool again — demand shifts right. A health report says sugary soda is harmful — demand for soda shifts left. Advertising, seasons, and trends all shift demand through tastes.
A growing city means more families — more demand for houses and school supplies. When a popular brand opens its first store in a new country, demand shifts right simply because more people can buy it.
If you hear next week’s PlayStation price will jump $50, you rush to buy today — demand shifts right now. If you expect a huge sale on winter coats in January, you wait — demand shifts left in December.
| Determinant | Example of increase | Shift direction |
|---|---|---|
| Income (normal good) | Allowance rises → buy more organic snacks | → right (increase) |
| Income (inferior good) | Allowance rises → buy less canned pasta | ← left (decrease) |
| Price of substitute | Movie ticket price ↑ → more streaming service demand | right |
| Price of complement | Printer price ↓ → more ink demand | right |
| Tastes | Viral dance uses a song → more song downloads | right |
| Number of buyers | New school opens → more lunch sales | right |
| Expectations | Future price ↑ → buy now (current demand ↑) | right |
🚗 2023–2024 electric vehicle boom: A real-world demand shift
Let’s join Mia, a high school sophomore in Texas. In 2022, her family barely considered an electric car. Gas was $3.20 per gallon. By 2024, gasoline hit $4.50 — a substitute’s price rose. The government introduced a $7,500 tax credit (effectively raising income). New EV models with longer range appeared (tastes changed). Charging stations doubled (complement improved). Her parents now say, “At every price, we want an EV more than before.” That’s a rightward shift of the demand curve for electric cars.
Mia’s story shows how multiple demand shifters often work together. Economists can even measure the shift. For a normal good like EVs, the relationship between income change and demand shift is positive. In math, we write the demand function as:
Where $P$ = price, $I$ = income, $P_s$ = substitute price, $P_c$ = complement price, $T$ = tastes, $N$ = number of buyers, $E$ = expectations. If any of these except $P$ changes, the curve shifts.
❓ Three questions students always ask about demand shifts
No — this is the most common mix-up! Change in quantity demanded is a movement along a fixed demand curve. It only happens when the product’s own price changes. Change in demand is a shift of the entire curve. All non-price factors cause a shift. Visualize: moving along a slide vs. lifting the whole slide higher.
Different shifters can push in opposite directions. Example: Your income rises (wants more restaurant meals — right shift) but a health scare about salt makes you cook at home (left shift). The net effect depends on which force is stronger. Economists call this “simultaneous shifters.”
Take a demand schedule. At $4, original demand was 100 units. After a taste shift, at $4 consumers want 150 units. The quantity demanded at the same price increased — that’s a shift. In an equation, the intercept or slope changes. Example: original $Q_d = 200 - 5P$, after shift $Q_d = 250 - 5P$. The constant got bigger → right shift.
📌 Why shifts matter — conclusion for young economists
📚 Footnote — abbreviations & term clarity
[1] Normal good: A good whose demand increases when consumer income rises. Example: organic food, new cars.
[2] Inferior good: A good whose demand decreases when income rises. Example: instant noodles, used textbooks.
[3] Substitute: Two goods that satisfy similar needs; if the price of one rises, demand for the other rises. Example: butter and margarine.
[4] Complement: Two goods used together; if the price of one falls, demand for the other rises. Example: printers and ink cartridges.
[5] EV: Electric vehicle — a car powered by electricity instead of gasoline.