Shifts in the Demand Curve

The demand curve for ice cream shows how much ice cream people buy at any given price, holding constant the many other factors beyond price that influence consumers buying decisions. As a result this demand curve need notbe stable over time. If something happens to alter the quantity demanded at any given price the demand curve shifts. For example suppose the American Medical Association discovered that people who regularly eat ice cream live longer healthier lives. The discovery would raise the demand for ice cream. At any given price buyers would now want to purchase a larger quantity of ice cream and the demand curve for ice cream would shift.

Illustrates shifts in demand. Any change that increases the quantity demanded at every price such as our imaginary discovery by the American Medical Association, shifts the demand curve to the right and is called an increase in demand. Any change that reduces the quantity demanded at every price shifts the demand curve to the left and is called a decrees in demand.

There are many variables that can shift the demand curve. Here are the most important.

Income what would to your demand for ice cream if you lost your job one summer? Most likely it would fall. A lower income means that you have less to spend in total so you would have to spend less on some and probably most goods. If the demand for a goods falls when income falls the good is called a normal good.