Change In Demand

Definition of 'Change In Demand'


A term used in economics to describe that there has been a change, or shift in, a market's total demand. This is represented graphically in a price vs. quantity plane, and is a result of more/less entrants into the market, and the changing of consumer preferences. The shift can either be parallel or nonparallel.

A parallel shift in demand means that there is no change in the elasticity of demand for the given market, but a nonparallel shift means there has been a change in elasticity.

Investopedia explains 'Change In Demand'


For example, if there is a perceived increase in the price of gasoline, then there will be a decrease in the demand for SUVs, ceteris paribus. This shift is likely to be parallel, as those who are still in the market for SUVs are still as sensitive to price increases in the prices of SUVs as before the perceived increase in gasoline prices took place.


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