Shifts in Demand and Supply
Income, tastes, the price of a substitute, a new technology or a ruined harvest move a whole curve rather than sliding along it. A fixed routine follows any event through: decide which curve moves, decide which way, then read the new crossing point.
What a learner can do afterwards
- Sort an event into a shift of demand, a shift of supply, or a movement along a curve
- Work a news story through the steps and state the new price and the new quantity
- Explain the 'other things equal' assumption and why the model needs it
1 · Read
Price slides you along a curve, but other factors move the whole curve. Higher incomes, new tastes, or a substitute turning dear lift demand right, while new tech pushes supply right and droughts or dear inputs pull it left. Each curve is drawn holding everything else fixed, so one change reads cleanly.
Frost destroys half a coffee crop. Work it through four steps: name the shock, shift the supply curve left, find the new crossing, and compare. The new crossing shows a higher price with less coffee sold.
The four-step routine fits any story: draw the market before the change, decide which curve the event touches, decide which way it moves, then read the new crossing. Demand right lifts price and quantity, while supply right cuts price but lifts quantity.
Guard the other-things-equal rule: only one change moves at a time. Without it, price, income and weather moves tangle and the crossing tells you nothing.
Shocks shift whole curves, and the four steps carry any event to its new crossing.
2 · Watch
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Where this leads
8 questions wait behind this lesson, each with its answer explained. Every answer feeds the sky: stars light as they are learned, and dim when it is time to come back.