Shifts in the Demand Curve

There are factors which can cause a shift in the demand curve. These factors are non-price determinants and include:

- Disposable income

- Consumer preferences

- Changes in population size

- Changes in the price of substitutes or complements.

Changes in these factors will result in a shift of the demand curve to the left. A rightward shift will occur as a result of an increase in the price of substitutes, decrease in the price of complements and an increase (or decrease) in income where the good is a normal good (or inferior good).

Figure 3.3

Figure 3.3 above shows that at any given price level, consumers are now willing to purchase more of a commodity.

A leftward shift of the demand curve will occur if there is a  decrease in the price of a substitute or increase in the price of a complement, or a decrease in income (where the good is normal) or increase in income (where the good is an inferior good).

Figure 3.4

Figure 3.4 above shows that at any given price level consumers are now willing to purchase less of a commodity.

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