What Shifts the Demand Curve

A demand curve plots quantity against the good's own price, holding everything else fixed. Shift it means something on that everything-else list changed. Economists group the causes into five: income (more income usually buys more of a normal good, less of an inferior good), the price of related goods (substitutes and complements), tastes and preferences, expectations about the future, and the number of buyers in the market. Each one moves the whole curve, right for more demand, left for less, at every price simultaneously.

This is why beef's price shifts chicken's demand curve but chicken's own price never does. Beef and chicken are substitutes, so a sharp rise in beef's price pushes shoppers toward chicken at every price point chicken might charge — that is a rightward shift. A change in chicken's own price instead moves you along chicken's fixed curve, tracing out a different quantity on the same line. Mixing these up is the single most common error in this unit.

Expectations work the same way but point toward the future. If buyers expect a laptop's price to jump 30 percent next month, they shift their buying forward into today, raising current demand right now even though today's price has not moved. This matters beyond one market: when something pushes demand up or down for goods broadly — a tax cut raising everyone's income, or a wave of pessimism about next year — the economy-wide version of this same logic shifts the aggregate demand curve, the concept unit three builds directly on top of this one.