Navigation
Demand and Supply - Demand Shift pg-3
An increase or shift out in demand

To the right, we show a shift out in demand, or an increase in demand. Suppose this is some individual's yearly demand for wool socks and suppose her tastes change so that she comes to enjoy wearing wool socks much more than she did before, causing her demand to shift from D1 to D2.

When her demand shifts from D1 to D2, she demands more socks each year at every price. When the market price is 5, her desired quantity demanded was 5 pairs of socks when her demand curve was D1, but she would like to buy 11 pairs after her demand shifts to D2. When the market price is 9, she would have bought only 1 pair when her demand was D1, but she will buy 7 pairs at that price now that her demand is D2. No matter what the price, she will buy more after her demand shifts out to D2 than she did at the same prices when her demand was D1.

The demand relationship graphed as D1 can also be expressed with the following mathematical expression:

QD1 = 10 - P

The demand relationship D2 is equivalent to the following equation:

QD2 = 16 - P
back forward
Copyright © 1995-2005 OnLineTexts.com, Inc. - All Rights Reserved