QUANTITATIVE ECONOMICS

Have you fully labelled the axes
Explaining changes in “a” and “b”
If the value of „a‟ in the demand function changes, then the demand curve shifts to the left or
the right, parallel to the original curve.
If the demand curve shifts to the right, then it means that there has been a change in one of
the non-price determinants of demand that has made the product more attractive to the
consumer and so more is demanded at each price.
If the demand curve shifts to the left, then it means that there has been a change in one of
the non-price determinants of demand that has made the product less attractive to the
consumer and so less is demanded at each price.
If the value of „b‟ changes in the demand function, then the slope of the demand curve will
change. The slope of the demand curve is „– b‟. If „b‟ gets smaller, then the slope of the
curve gets steeper and if „b; gets bigger, the curve will be flatter.
Produced by Ian Dorton & Jocelyn Blink Page 5