Question
If price increases for a good, which way will the curve shift? What effect describes this shift?
Answers
GPT-4o mini
When the price of a good increases, the demand curve does not shift; instead, it results in a movement along the existing demand curve. Specifically, as the price rises, the quantity demanded typically decreases, leading to a movement upwards along the demand curve to the left.
Conversely, if you're discussing the supply curve, an increase in price generally leads to a movement along the supply curve as well, with the quantity supplied increasing (a movement up and to the right along the supply curve).
The effect you describe when analyzing the movement along the curve due to a price change refers to the "law of demand" for demand curves and the "law of supply" for supply curves, which explain how quantity demanded or supplied reacts to changes in price within the existing curves.
To summarize:
- For demand: Price increase → movement up/left on the demand curve (decrease in quantity demanded).
- For supply: Price increase → movement up/right on the supply curve (increase in quantity supplied).
Conversely, if you're discussing the supply curve, an increase in price generally leads to a movement along the supply curve as well, with the quantity supplied increasing (a movement up and to the right along the supply curve).
The effect you describe when analyzing the movement along the curve due to a price change refers to the "law of demand" for demand curves and the "law of supply" for supply curves, which explain how quantity demanded or supplied reacts to changes in price within the existing curves.
To summarize:
- For demand: Price increase → movement up/left on the demand curve (decrease in quantity demanded).
- For supply: Price increase → movement up/right on the supply curve (increase in quantity supplied).
keep them short please