3.7 Summary
| 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/
- The best way to learn these shifts is not to memorize them, but to practice shifts on the diagram to view their effects. ↵
