3.7 Summary
The Demand Shocks are summarized in the table below.
The best way to learn these shifts is not to memorize them but to practice shifts on the diagram to view their effects.
| Demand Shock | Increase in Demand, Shifts curve to the Right | Decrease in Demand, Shifts curve to the Left |
|---|---|---|
| Price of a Substitute | Increases | Decreases |
| Price of a complement | Decreases | Increases |
| Buyers’ Expectations about Future Prices | Increases (normal good) | Decreases (normal good) |
| Preferences | Increases | Decreases |
| Demographic Characteristics (Population) | Increases | Decreases |
| Buyers’ Expectations about Future Prices | Increases | Decreases |
The Supply shocks are summarized in the table below:
| Supply Shock | Increase in Supply, Shifts curve to the Right | Decrease in Supply, Shifts curve to the Left |
|---|---|---|
| Price of factors of production | Decreases | Increases |
| Price of a Substitute | Decreases | Increases |
| Sellers’ Expectations about Future Prices | Decreases | Increases |
| Number of Producers | Increases | Decreases |
Reference
Published by Statista Research Department, & 4, F. (2022, February 4). Retail prices gasoline Canada 2021. Statista. https://www.statista.com/statistics/444194/average-retail-price-for-regular-unleaded-gasoline-in-canada/
