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Showing posts with the label Shifts in the Demand Curve

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 ...