Key Idea: Demand is not wanting something. It is wanting it and being able to pay for it. This topic is one curve and two rules: the good's own price moves you along the curve, and anything else moves the curve. Almost every diagram in the rest of the course starts here. Where you meet it:
Paper 1
- Essays.
- Explain [10]: two determinants that shift demand, or why rising demand raises price while a higher price cuts quantity demanded.
Paper 2
- Data response.
- Define demand for 2 marks: willing and able.
- A demand diagram inside 4-mark explains all through Unit 2.
Every later diagram
- Same curve, new setting.
- Demand and supply, then elasticity, then every government intervention in Unit 2.
📉 What demand is, and why it slopes down
Demand is the quantity of a good people are willing and able to buy at each price, over a period of time. Price goes on the vertical axis, quantity on the horizontal, and the curve slopes down: as price falls, people buy more.
| Why you buy more when price falls | What happens |
|---|---|
| Income effect | your money goes further, so you can afford more of it |
| Substitution effect | it is now cheaper than its rivals, so you switch to it |
| Ceteris paribus | everything else is held still, so price is the only cause on the table |
Willing and able. Wanting a £900 phone is not demand. Wanting one and having £900 is. Market demand is every buyer's demand added together. When a question says demand, it means market demand.
🔄 What shifts the curve
A change in the good's own price never shifts the curve. Five other things do. Remember them as TIRES.
| Determinant | Demand shifts right when… | Example |
|---|---|---|
| Tastes | the good gets more popular | a health study praises oats |
| Income | income rises, for a normal good (it shifts left for an inferior good) | more restaurant meals; fewer instant noodles |
| Related goods | a substitute's price rises, or a complement's price falls | coach fares rise, so more train tickets; consoles get cheaper, so more games |
| Expectations | people expect the price to rise soon | buying now, before the price goes up |
| Size of population | there are more buyers in the market | a new university brings students to town |
Important: Demand increased earns nothing on its own. Say which determinant moved and which way: coach travel is a substitute, so cheaper coaches cut demand for train tickets. Two determinants means two different ones. Income and people having more money is one determinant, said twice.
↔️ Movement or shift?
Before you draw anything, ask one question: did the price of this good change, or did something else change?
Price changed: movement along: The curve stays where it is. You move to a new point on it.. Price rises: quantity demanded **contracts** (up and left).. Price falls: quantity demanded **extends** (down and right).. Say **change in quantity demanded**..
Something else changed: shift: The whole curve moves to a new position.. Right = **increase in demand**: more wanted at every price.. Left = **decrease in demand**: less wanted at every price.. Say **change in demand**..
Rising demand raises price. That is the curve shifting right: at the old price buyers want more than sellers offer, so there is a shortage and the price is bid up. A higher price cuts quantity demanded. That is a movement along the new curve as the price rises. The market settles where the two meet.
✍️ Worked examples
Three shapes this topic is asked in, with new scenarios. Try each before opening the plan.
A text says sales of video games rose after the price of games consoles fell. Define the term complements.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
Now a Paper 2 diagram question.
A new university opens in a town and its population grows by 10%. Using a demand diagram, explain the effect on the market for rented flats.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
Animated graph
Watch the graph build step by step in study mode.
And the Paper 1 shape.
Using diagrams, explain how a fall in the price of games consoles affects the demand for video games and the demand for board games.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
✅ Quick self-check
Tap each card to check yourself.
A student wants a £900 phone and has £200. Is that demand? No. Demand is wanting it and being able to pay. Wanting alone is a wish.
Which axis is price on? The vertical axis. Quantity goes on the horizontal one, the reverse of the maths habit.
Oats get a glowing health report. Movement or shift? Shift right. Tastes changed, not the price of oats. Say increase in demand.
Oats get more expensive. Movement or shift? Movement up and left along the curve. Say quantity demanded contracts, not demand falls.
Income rises and demand for instant noodles falls. What kind of good? An inferior good. Once they can afford it, buyers move to something they prefer.
Printer prices fall. What happens to demand for ink cartridges? It rises: the curve shifts right. Ink is a complement of printers.
Demand shifts right. Why does the price rise, not just the quantity? At the old price there is a shortage. Buyers compete, sellers raise the price, and quantity demanded contracts along the new curve until it matches supply.
What does TIRES stand for? Tastes, Income, Related goods, Expectations, Size of population: the five things that shift demand.
Exam tips
- Willing and able. That phrase is the difference between a 2-mark and a 1-mark definition.
- Price on the vertical axis. It is the habit most often broken under time pressure.
- Own price changes: movement along, and the words are quantity demanded. Anything else: shift, and the word is demand. Never swap them.
- Name the determinant and the direction in one sentence: coaches are a substitute, so cheaper coaches cut demand for trains.
- Shift one curve unless the question asks for two. Keep D₁ on the page and label the new one D₂.
- The shortage at the old price is why price rises. Say it; most answers skip it.
- Two determinants means two different ones.