Last time you built a demand curve from price-quantity data. But what happens when something other than price changes? Your demand curve doesn't stay put – it shifts!
Think of a demand curve like a flexible ribbon that can move left or right on your graph.
Engagement Message
What might make people want more coffee even at the same price?
When non-price factors change, the entire demand curve shifts. If people want more at every price, demand shifts right. If they want less at every price, demand shifts left.
These shifts are called "changes in demand" (versus "changes in quantity demanded" which happen along the same curve).
Engagement Message
Can you think of something that might make you want more pizza regardless of price?
Income changes are a major demand shifter. When your income rises, you typically buy more of most goods – these are called "normal goods." Your demand curve shifts right.
But some goods are "inferior goods" – when income rises, you buy less (like instant ramen when you can afford restaurant meals).
Engagement Message
If your income doubled, would you buy more or less instant ramen?
Tastes and preferences also shift demand curves. When a product becomes trendy, demand shifts right. When it falls out of favor, demand shifts left.
Remember when everyone wanted fidget spinners? That was a rightward demand shift in action!
Engagement Message
What's something that became popular recently and shifted demand?
Substitute goods create interesting demand shifts. When the price of Coke rises, some people switch to Pepsi – Pepsi's demand curve shifts right.
Complement goods work oppositely. When gas prices rise, demand for large trucks shifts left because they're used together.
