USIU Farmer's Agribusiness Training: Module 5 Lesson 2

c) Change in Demand – shifts (due to change in other factors)
As we noted in lesson 1 with respect to the PPC, similarly, an increase in demand shifts the demand curve to the right while a decrease in demand shifts the demand curve to the left. Usually, this is simply referred to as change in demand. Shifts usually result from changes in other factors (other than price of good x). One way of testing this is to ask, why would anyone buy more (or less) when the price of x is held constant?

A summary of the effects from changes in price (change in quantity demanded) and changes from other factors (change in demand) is presented below.

Quantity demanded decrease ↓ if there is an ↑ in price of x

Demand decrease ↓ if there is a

↓ in price of substitute
↑ in price of complement
↓ in income
↓ tastes & preferences
↓ in population
↓ Time
Expect above change