Shifts in demand
The position of the demand curve will shift to the left or right following a change in an underlying determinant of demand.
Increases in demand are shown by a shift to the right in the demand curve. This could be caused by a number of factors, including a rise in income, a rise in the price of a substitute or a fall in the price of a complement.
A shift in demand to the right means an increase in the quantity demanded at every price. For example, if drinking cola becomes more fashionable demand will increase at every price.
Increases in demand
An increase in demand can be illustrated by a shift in the demand curve to the right.
Decreases in demand
Conversely, demand can decrease and cause a shift to the left of the demand curve for a number of reasons, including a fall in income, assuming a good is a normal good, a fall in the price of a substitute and a rise in the price of a complement.
For example, if the price of a substitute, such as fizzy orange, falls, then less cola is demanded at each price, as consumers switch to the substitute.
Decreases in demand are shown by a shift of the demand curve to the left.