When economists talk about a “change in demand,” saying “the demand for Xin-
creased” or “the demand for Ydecreased,” they mean that the demand curve for Xor Y
shifted—notthat the quantity demanded rose or fell because of a change in the price.
Understanding Shifts of the Demand Curve
Figure 5.4 illustrates the two basic ways in which demand curves can shift. When econo-
mists talk about an “increase in demand,” they mean a rightwardshift of the demand
curve: at any given price, consumers demand a larger quantity of the good or service than
52 section 2 Supply and Demand
figure 5.3
A Movement Along the Demand
Curve Versus a Shift of the
Demand Curve
The rise in the quantity demanded when going
from point Ato point Breflects a movement along
the demand curve: it is the result of a fall in the
price of the good. The rise in the quantity de-
manded when going from point Ato point C
reflects a change in demand: this shift to the right
is the result of a rise in the quantity demanded at
any given price.
0 7 8.1 9.7 10 1513 17
Quantity of coffee beans
(billions of pounds)
$2.00
1.75
1.50
1.25
1.00
0.75
0.50
Price of
coffee beans
(per pound)
D 1 D 2
AC
B
A shift of the
demand curve...
... is not the
same thing as
a movement along
the demand curve.
figure 5.4
Shifts of the Demand Curve
Any event that increases demand shifts the
demand curve to the right, reflecting a rise
in the quantity demanded at any given
price. Any event that decreases demand
shifts the demand curve to the left, reflect-
ing a fall in the quantity demanded at any
given price.
Price
Quantity
D 3 D 1 D 2
Decrease
in demand
Increase
in demand