<p>Separate the concepts "an increase in quantity demanded" from "shifting of the demand schedule". </p>

<p>The second means that for some reason, say change in tastes, preferences, <em>the whole demand curve shifts</em>: now, <em>quantity demanded</em> for the product has increased for all price levels, compared to the previous situation, but of course  the downward slope remains.</p>

<p>Your economics textbook should have said</p>

<blockquote>
  <p>"Demand curves slope downward - but when demand increases (<em>in the
  sense of shifting the whole demand curve due to, say, a change in
  consumer preferences</em>), <em>equilibrium</em> price goes up".</p>
</blockquote>

CC BY-SA 4.0
2018-06-04T10:26:57.370Z
+1 for clearing up this very common confusion both in textbooks and students
Maarten Punt
CC BY-SA 4.0
2018-06-02T11:51:26.170Z
2018-06-02T11:51:26.170Z
Alecos Papadopoulos
<p>The book probably intends you to think like this</p>

<p><a href="https://i.sstatic.net/5q6ZZ.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/5q6ZZ.png" alt="enter image description here"></a></p>

<p>so you have a downward-sloping demand curve (lower prices lead to higher demand), but if demand increases for a reason not related to price (a shift from the <em>Demand 1</em> curve to the <em>Demand 2</em> curve) then the new equilibrium on the upward-sloping supply curve will be at a higher price and quantity</p>

<p>There are a lot of implicit assumptions here, especially </p>

<ul>
<li>the direction of the slope of the supply curve</li>
<li>whatever changed the demand curve did not affect the supply curve  </li>
</ul>

CC BY-SA 4.0
2018-06-02T10:58:28.143Z
This is exactly the confusion in the book. On the one hand, you are saying that 'lower prices lead to higher demand'. On the other hand, you draw a picture (much like the picture in my textbook) showing the opposite.
Sceptical Student
CC BY-SA 4.0
2018-06-01T19:42:43.153Z
2018-06-01T19:42:43.153Z
Henry
<p>My economics textbook says that demand curves slope downward - but then goes on to say that when demand increases, prices go up! Does anyone else find this confusing?</p>

CC BY-SA 4.0
2018-06-01T19:27:32.240Z
Does your textbook explain what it means by "demand increases"?  Is that a movement along the demand curve, or is it a shift of the whole curve?
Adam Bailey
<mathematical-economics>
Demand curve confusion
Sceptical Student
# Demand curve confusion

(Asked by: username_0 on 2018-06-01)

My economics textbook says that demand curves slope downward - but then goes on to say that when demand increases, prices go up! Does anyone else find this confusing?

**Tags:** mathematical-economics
> **Comments:**
> **username_1**: Does your textbook explain what it means by "demand increases"?  Is that a movement along the demand curve, or is it a shift of the whole curve?  

---

## 2 answers

### Answer by username_2 on 2018-06-02. Score: 5

Separate the concepts "an increase in quantity demanded" from "shifting of the demand schedule".

The second means that for some reason, say change in tastes, preferences, *the whole demand curve shifts*: now, *quantity demanded* for the product has increased for all price levels, compared to the previous situation, but of course the downward slope remains.

Your economics textbook should have said

> "Demand curves slope downward - but when demand increases (*in the
> sense of shifting the whole demand curve due to, say, a change in
> consumer preferences*), *equilibrium* price goes up".

> **Comments:**
> **username_3**: +1 for clearing up this very common confusion both in textbooks and students  

---

### Answer by username_4 on 2018-06-01. Score: 3

The book probably intends you to think like this

[![enter image description here](https://i.sstatic.net/5q6ZZ.png)](https://i.sstatic.net/5q6ZZ.png)

so you have a downward-sloping demand curve (lower prices lead to higher demand), but if demand increases for a reason not related to price (a shift from the *Demand 1* curve to the *Demand 2* curve) then the new equilibrium on the upward-sloping supply curve will be at a higher price and quantity

There are a lot of implicit assumptions here, especially

* the direction of the slope of the supply curve
* whatever changed the demand curve did not affect the supply curve

> **Comments:**
> **username_0**: This is exactly the confusion in the book. On the one hand, you are saying that 'lower prices lead to higher demand'. On the other hand, you draw a picture (much like the picture in my textbook) showing the opposite.  

---

