Microeconomics,, 16th Canadian Edition

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Figure 3-3 Shifts in the Demand Curve


A rightward shift in the demand curve from to indicates an
increase in demand; a leftward shift from to indicates a decrease
in demand. An increase in demand means that more is demanded at each
price. A decrease in demand means that less is demanded at each price.


Let’s now consider five important causes of shifts in the demand curve.



  1. Consumers’ Income


If average income rises, consumers as a group can be expected to desire
more of most products, other things being equal. We therefore expect
that a rise in average consumer income shifts the demand curve for most
products to the right—an increase in demand. Such a shift is shown in
Figure 3-2.


Goods for which the quantity demanded increases when income rises are
called normal goods. This term reflects economists’ empirical finding that
the demand for most products increases when income rises.


D 0 D 1
D 0 D 2

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