What causes a shift in the demand curve?
We now consider the factors that cause an increase or a decrease in demand for a good or service: These factors are also called the conditions of demand. A shift in the demand curve means that either more or less will be demanded at each and every ruling price in the market. using the diagram above, the initial demand curve is D1. An outward shift in demand takes the curve to D2. More is being demanded at the price shown by the green line. Essentially – shifts in demand are caused by changes in the willingness and ability of consumers to buy a particular product at a given price. The factors discussed below are those that most commonly affect the market demand for a given product: Make sure you understand these conditions of demand really well – they will be tested in the final AS exams! i) Changing price of a substitute Substitutes are goods in competitive demand and act as replacements for another product. For example, a rise in the price of Esso petrol should cause a substitution ef
