It’s something I’ve noticed a lot lately: prices changing
demand. The only problem is that current prices cannot change
(shift) demand; prices only change quantity demanded.
What people usually mean when they say “changing demand” is really
“changing quantity demanded”. This may seem trivial, but as my
headline suggests, I have an obligation to my professors to make the
distinction.
Please refer to this tutorial from Rochester (a very solid econ program) for details. Slides 39-46 are good.
To
appease the economists in the Locker Room, I will note that
expectations of future prices can and do shift demand. There, now
everyone is confused.
