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tutoringcenter
Shifters of Supply & Demand
Mar 15 2011, 12:58 PM EDT | Post edited: Mar 15 2011, 12:59 PM EDT
Cause an increase in demand (RIGHTWARD SHIFT demand curve)
o Decrease in price of complement
o Increase in price of substitute
o Increase in INCOME for a NORMAL GOOD
o Decrease in INCOME for an INFERIOR GOOD
o Increase in number of buyers
o Buyers expect higher prices in FUTURE
o Buyers think it’s good for them (preference)
***When the opposite of any of these shifters occurs demand will decrease (LEFTWARD SHIFT)

Cause an increase in supply (RIGHTWARD SHIFT supply curve)
o Decrease in price of inputs of product
o Improvement in technology (that causes lower production cost)
o Increase in number of sellers
o Sellers expect lower prices in FUTURE
o Decrease in price of a good that uses similar inputs
o Good weather/production conditions
***When the opposite of any of these shifters occurs supply will decrease (LEFTWARD SHIFT)

Any time the PRICE of the GOOD changes there’s an increase/decrease in the QUANTITY DEMANDED/SUPPLIED -->movement ALONG the curve
o Related to the LAW OF DEMAND and LAW OF SUPPLY
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