16.5 million

$26,000 12.8 million

16.0 million

TABLE 3.4 Price and Demand Shifts: A Car Example

24.0 million

22.0 million

20.0 million

19.0 million

18.5 million

18.0 million

Now, imagine that the economy slows down so that many people lose their jobs or work fewer hours, reducing
their incomes. In this case, the decrease in income would lead to a lower quantity of cars demanded at every
given price, and the original demand curve D0 would shift left to D2. The shift from D0 to D2 represents such a
decrease in demand: At any given price level, the quantity demanded is now lower. In this example, a price of

$20,000 means 18 million cars sold along the original demand curve, but only 14.4 million sold after demand

fell.

When a demand curve shifts, it does not mean that the quantity demanded by every individual buyer changes

by the same amount. In this example, not everyone would have higher or lower income and not everyone
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