An increase in annual household income increases the quantity
demanded at each price (for all normal goods). This is shown by the
rightward shift in the demand curve, from to When average
income rises from $50 000 to $60 000 per year, quantity demanded at a
price of $60 per bushel rises from 65 000 bushels per year to 95 000
bushels per year. A similar rise occurs at every other price.
A change in any of the variables (other than the product’s own price) that affect the quantity
demanded will shift the demand curve to a new position.A demand curve can shift to the right or to the left, and the difference is
crucial. In the first case, more is desired at each price—the demand curve
shifts rightward so that each price corresponds to a higher quantity than it
did before. This is an increase in demand. In the second case, less is
desired at each price—the demand curve shifts leftward so that each price
corresponds to a lower quantity than it did before. This is a decrease in
demand. Figure 3-3 shows increases and decreases in demand, and the
associated shifts in the demand curve.
D 0 D 1.