Factors that ShiftDemand & Supply

Variables that influence buyers1

2

Variable A Change in This Variable . . .

Price of the good itself Income Prices of related goodsTastes Expectations Number of buyers

Represents a movement along the demand curve

Shifts the demand curveShifts the demand curveShifts the demand curveShifts the demand curveShifts the demand curve

This table lists the variables that affect how much consumerschoose to buy of any good. Notice the special role that the priceof the good plays: A change in the good’s price represents amovement along the demand curve, whereas a change in one ofthe other variables shifts the demand curve.

Table 4.1 Factors That Shift the Demand

Curve

Variables that influence sellers2

4

Variable A Change in This Variable . . .

Price of the good itself Input prices Technology Expectations Number of sellers

Represents a movement along the supply curve

Shifts the supply curveShifts the supply curveShifts the supply curveShifts the supply curve

This table lists the variables that affect how much producers choose to sell of any good. Notice the special role that the price of the good plays: A change in the good’s price represents a movement along the supply curve, whereas a change in one of the other variables shifts the supply curve

Table 4.2 Factors That Shift the Supply Curve