given price.

Step 2. Suppose income increases. As a result of the change, are consumers going to buy more or less pizza? The

answer is more. Draw a dotted horizontal line from the chosen price, through the original quantity demanded, to
the new point with the new Q1. Draw a dotted vertical line down to the horizontal axis and label the new Q1.
Figure 3.7 provides an example.

FIGURE 3.7 Demand Curve with Income Increase With an increase in income, consumers will purchase larger

quantities, pushing demand to the right.

Step 3. Now, shift the curve through the new point. You will see that an increase in income causes an upward (or

rightward) shift in the demand curve, so that at any price the quantities demanded will be higher, as Figure 3.8

illustrates.

Access for free at openstax.org
3.2 • Shifts in Demand and Supply for Goods and Services 59

FIGURE 3.8 Demand Curve Shifted Right With an increase in income, consumers will purchase larger quantities,
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