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180 Fighting the Diseases of Poverty
Figure 3 The impact of a rightward shift in the demand
curve
P
S
P1
P0
D1
D
Q0
Q1
Q
Figure 3 shows that when consumer willingness to pay increases
(for example as a result of a rise in income), the demand curve shifts
to the right. This leads to an increase in the amount supplied (from
Q 0 to Q 1 ) and also to an increase in the minimum price (from P 0 to
P 1 ). This is because the supply has been met by moving along the
original supply curve, for which the cost of producing an incremental
unit is assumed to rise as output rises — because more expensive
production methods have to be brought on-stream.