<blockquote>
  <p>On a demand curve when the demand increases the price will decrease.</p>
</blockquote>

<p>You actually mean "along the demand curve, a decrease in price will increase quantity demanded, all else equal". This is the <a href="https://en.wikipedia.org/wiki/Law_of_demand" rel="nofollow noreferrer">law of demand</a>, and it holds for ordinary ("non-Giffen/Veblen") goods that have downward-sloping demand curves. There is <em>no shift</em> of the demand schedule in this scenario:</p>

<p><a href="https://14solvbr.files.wordpress.com/2012/09/movement-demand-curve.jpg" rel="nofollow noreferrer"><img src="https://14solvbr.files.wordpress.com/2012/09/movement-demand-curve.jpg" alt="enter image description here"></a></p>

<blockquote>
  <p>However on a demand and supply graph, when the demand shifts to the right, the price will increase.</p>
</blockquote>

<p>Yes, when the demand curve <em>shifts</em> to the right (all else equal), the equilibrium market price rises to account for the fact that consumers are now willing to pay more. The increase in price is the mechanism by which excess demand at the initial price is cleared:</p>

<p><a href="https://i.sstatic.net/lSt2q.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/lSt2q.jpg" alt="enter image description here"></a></p>

<hr>

<p>There is no contradiction here in the supply-and-demand model. Note that movements <em>along</em> the demand curve can only occur when we are away from a market equilibrium. These price movements are traced out by shifts of the supply curve and they continue until the new market equilibrium is reached.</p>

<p>Based on your vocabulary, you are likely misunderstanding the demand curve with actual quantity demanded.</p>

CC BY-SA 4.0
2018-10-13T18:59:17.237Z
2018-10-13T19:54:50.653Z
2018-10-13T19:54:50.653Z
Kenneth Rios
<p>To answer your question, think of the actual function</p>

<p>The demand function is dependent on quantity, and the result of which will be the price. The utility function and budget constraints are the same </p>

<p>On the other hand, if there is another impact on demand, which is not the quantity, let's say a health trend, then the <em>entire</em> demand function will change and meet the supply for health food at a higher place
The utility function will <em>change</em> and budget constraints will be the same</p>

CC BY-SA 4.0
2018-10-13T18:11:23.340Z
2018-10-13T18:11:23.340Z
Guy Louzon
<p>On a demand curve when the demand increases the price will decrease. However on a demand and supply graph, when the demand shifts to the right, the price will increase. I understand why, but then what is the point of analyzing a demand curve, if it contradicts the market equilibrium graph?</p>

<p>I am sorry if this is a stupid question. It has only been a month since I have started economics in high school. </p>

<microeconomics>
When demand increases why does the price decrease but equilibrium price increase?
Rileyna
# When demand increases why does the price decrease but equilibrium price increase?

(Asked by: username_0 on 2018-10-13)

On a demand curve when the demand increases the price will decrease. However on a demand and supply graph, when the demand shifts to the right, the price will increase. I understand why, but then what is the point of analyzing a demand curve, if it contradicts the market equilibrium graph?

I am sorry if this is a stupid question. It has only been a month since I have started economics in high school.

**Tags:** microeconomics


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## 2 answers

### Answer by username_1 on 2018-10-13. Score: 2

> On a demand curve when the demand increases the price will decrease.

You actually mean "along the demand curve, a decrease in price will increase quantity demanded, all else equal". This is the [law of demand](https://en.wikipedia.org/wiki/Law_of_demand), and it holds for ordinary ("non-Giffen/Veblen") goods that have downward-sloping demand curves. There is *no shift* of the demand schedule in this scenario:

[![enter image description here](https://14solvbr.files.wordpress.com/2012/09/movement-demand-curve.jpg)](https://14solvbr.files.wordpress.com/2012/09/movement-demand-curve.jpg)

> However on a demand and supply graph, when the demand shifts to the right, the price will increase.

Yes, when the demand curve *shifts* to the right (all else equal), the equilibrium market price rises to account for the fact that consumers are now willing to pay more. The increase in price is the mechanism by which excess demand at the initial price is cleared:

[![enter image description here](https://i.sstatic.net/lSt2q.jpg)](https://i.sstatic.net/lSt2q.jpg)

---

There is no contradiction here in the supply-and-demand model. Note that movements *along* the demand curve can only occur when we are away from a market equilibrium. These price movements are traced out by shifts of the supply curve and they continue until the new market equilibrium is reached.

Based on your vocabulary, you are likely misunderstanding the demand curve with actual quantity demanded.


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### Answer by username_2 on 2018-10-13. Score: 0

To answer your question, think of the actual function

The demand function is dependent on quantity, and the result of which will be the price. The utility function and budget constraints are the same

On the other hand, if there is another impact on demand, which is not the quantity, let's say a health trend, then the *entire* demand function will change and meet the supply for health food at a higher place
The utility function will *change* and budget constraints will be the same


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