1. Change in QD or Change in D
Economics Unit 4, Lesson 1
Demand
Change in QD or
Change in D
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2. Objectives
Understand the difference between a change in demand and a change in quantity demanded.
Identify the determinants of a change in demand and quantity demanded.
Graph a change in D and QD.
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3. Change in Quantity Demanded
A change in quantity demanded is caused by a change in price. This is the only reason for a change in quantity demanded.
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4. P P1 D Q1 Q
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5. Change in Quantity Demanded
Since the demand curve shows the quantity demanded at all prices if price is the only thing that changes, then our demand curve is still valid and we can show this change by simply moving along the demand curve.
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6. P P2 P1 D Q2 Q1 Q
 QD
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7. Change in Demand
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8. If one of the conditions changes, willingness or financial ability of people to buy different amounts of goods and services, we see a change in demand at each and every price level.
The original demand curve is no longer valid. We must have a new demand curve. This is called a shift of the demand curve.
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9. The entire demand curve shifts.
Increase in Demand P D1 Q
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10. The entire demand curve shifts.
Increase in Demand P D2 D1 Q
Shift Right
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11. The entire demand curve shifts.
Increase in Demand Decrease in Demand P P D1 D2 D1 Q Q
Shift Right
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12. The entire demand curve shifts.
Increase in Demand Decrease in Demand P P D1 D2 D2 D1 Q Q
Shift Right
Shift Left
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13. Five Reasons for a Change in Demand
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14. Five Reasons for a Change in Demand
1. Change in Consumer Taste or Preference
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15. Five Reasons for a Change in Demand
1. Change in Consumer Taste or Preference
Includes advertising, news reports, trends, etc.
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16. Five Reasons for a Change in Demand
1. Change in Consumer Taste or Preference
Includes advertising, news reports, trends, etc.
The good becomes more popular, so the curve:
Shifts Right
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17. Five Reasons for a Change in Demand
1. Change in Consumer Taste or Preference
Includes advertising, news reports, trends, etc. Or
If the good becomes unpopular, the curve will:
Shift Left
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18. Five Reasons for a Change in Demand 2. Change in Consumer Income
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19. Five Reasons for a Change in Demand 2. Change in Consumer Income
Income Demand at each and every price level
Shift Right
Shift Left
(if the good is a normal good)
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20. Five Reasons for a Change in Demand
3. Change in Market Size or Number of Buyers or Groups Within the Population
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21. Five Reasons for a Change in Demand
3. Change in Market Size or Number of Buyers or Groups Within the Population
Market Size Demand Shift Right Market Size Demand Shift Left
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22. Five Reasons for a Change in Demand
4. Change in Consumer Expectations about Price
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23. Five Reasons for a Change in Demand
4. Change in Consumer Expectations
If buyers think price will go up in the future,
then demand now
Shift Right
If buyers think price will go down in the future,
Shift Left
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24. Five Reasons for a Change in Demand
5. Change in Price of Related Goods
There are two types of related goods.
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25. Five Reasons for a Change in Demand
5. Change in Price of Related Goods
A. Substitute - can use one good in place of another
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26. Five Reasons for a Change in Demand
5. Price of Related Goods
A. Substitute - can use one good in place of another
Price of butter ,
then demand for margarine?
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27. Five Reasons for a Change in Demand
5. Price of Related Goods
A. Substitute - can use one good in place of another
Price of butter ,
then demand for margarine .
Shift Right
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28. Five Reasons for a Change in Demand
5. Price of Related Goods
B. Complement - one good used with another good
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29. Five Reasons for a Change in Demand
5. Price of Related Goods
B. Complement - one good used with another good
Price of milk ,
then the demand for cookies?
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30. Five Reasons for a Change in Demand
5. Price of Related Goods
B. Complement - one good needed to use another good
Price of milk ,
then the demand for cookies .
Shift Left
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31. Five Reasons for a Change in Demand – This might help you remember these reasons.
TIMER
Change in consumer Taste
Change in consumer Income
Change in Market Size or buyers
Change in consumer Expectations
Change in price of Related Goods
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