What is the definition of demand in microeconomics?

In microeconomics, demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a given period of time. It is a fundamental concept that helps explain consumer behavior and market dynamics.

How does the law of demand explain consumer behavior?

The law of demand states that, all else being equal, as the price of a good or service decreases, the quantity demanded increases, and vice versa. This inverse relationship occurs because consumers tend to buy more of a product when it is cheaper and less when it is more expensive, reflecting their desire to maximize utility.

What factors can cause a shift in the demand curve?

Several factors can cause a shift in the demand curve, including changes in consumer income, preferences, expectations, the prices of related goods (substitutes and complements), and demographic changes. A shift to the right indicates an increase in demand, while a shift to the left indicates a decrease.

How is elasticity of demand calculated and what does it indicate?

Elasticity of demand measures how responsive the quantity demanded is to a change in price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. If the elasticity is greater than 1, demand is elastic; if it is less than 1, demand is inelastic. Elasticity indicates how sensitive consumers are to price changes.

What is the difference between individual demand and market demand?

Individual demand refers to the demand for a good or service by a single consumer, while market demand is the total demand for a good or service by all consumers in a market. Market demand is derived by summing the individual demands at each price level, providing a broader view of consumer behavior in the market.

Why is "Calling a price change a 'shift' of the demand curve." a common mistake in Demand?

Why it happens: Confusing terminology. How to avoid it: A change in the good's own price causes MOVEMENT along the curve. SHIFTS come from non-price determinants only.

Why is "Treating demand as 'what consumers want'." a common mistake in Demand?

Why it happens: Everyday usage. How to avoid it: Demand = willing AND ABLE to buy. Wishes without purchasing power don't count.

Why is "Reversing substitute/complement effects." a common mistake in Demand?

Why it happens: Forgetting direction. How to avoid it: Substitute price ↑ → demand for THIS good ↑ (consumers switch). Complement price ↑ → demand for THIS good ↓ (pair is now more expensive).

MicroeconomicsIB Economics SL

Demand

Work through the notes, try the practice questions, then take the quiz. The report tells you exactly what to revise next.

PreviousNext

Learn this Topic

Start with the slides for the quick version, then go deeper with the full study notes.

Short Study Notes in the form of Slides

Read the notes first. If the method in a worked example clicks, you're ready for the questions.

Short Study Notes — Demand

Start with these resources to cover the key concepts, then work through the practice questions.

Page 1 / 0

Detailed Notes

Full prose, callouts and a recap — built for A* mastery, not just a quick scan.

Take these study notes with you

Download a branded PDF — full prose, callouts, recap and memorise list for Demand, ready to print or save offline.

Demand — IB Economics SL: the demand curve, law of demand, shifts vs movements, non-price determinants

Unit 2.1 of the 2022+ syllabus. The demand curve, law of demand, distinction between movement along the curve and a shift of the curve, and the major non-price determinants of demand.

What you’ll learn

Mapped to the IB DP Economics SL subject guide (2022 onwards (first assessment May 2024)).

2.1.1 — Define demand and state the law of demand.
2.1.2 — Distinguish movement along and shifts of the demand curve.
2.1.3 — Identify non-price determinants of demand.
2.1.4 — Derive market demand from individual demand.

The demand curve and law of demand

Downward-sloping.

Demand is the quantity of a good or service that consumers are willing AND able to buy at each price during a time period. Both willingness and ability matter — a wish without purchasing power isn't demand.

The law of demand — as price rises, quantity demanded falls (and vice versa), ceteris paribus. This gives the demand curve its downward slope.

Two reasons:

Income effect — higher price reduces real purchasing power.
Substitution effect — higher price makes substitutes relatively cheaper, so consumers switch.

Willing AND able.
Law of demand: P↑ → Qd↓.
Income + substitution effects.

Shifts vs movements and non-price determinants

Critical distinction for diagrams.

Movement ALONG the demand curve = change in quantity demanded caused by a change in the good's own price. Curve doesn't shift.

Shift of the demand curve = change in demand at every price, caused by a change in a NON-PRICE determinant:

Determinant	Effect
Income (normal good)	Income ↑ → demand ↑ (curve shifts right)
Income (inferior good)	Income ↑ → demand ↓ (curve shifts left)
Substitute price	Substitute price ↑ → demand for this good ↑
Complement price	Complement price ↑ → demand for this good ↓
Tastes/preferences	Favourable change → demand ↑
Expectations	Expected future price ↑ → demand now ↑
Number of buyers	More buyers → demand ↑

Worked example. If the price of coffee rises:

MOVEMENT along demand curve for coffee — quantity demanded falls.
SHIFT of demand curve for tea (substitute) — demand for tea rises.

Individual → market demand. Add up the quantity demanded by each consumer at each price (horizontal summation).

Movement = price change.
Shift = non-price determinant.
Substitutes: opposite direction; complements: same direction.

How it’s examined

Paper 1: 'Distinguish between a movement and a shift of the demand curve.' Paper 2: identify the cause of a shift from context.

Sources: IB Diploma Programme Economics subject guide (IBO, 2020 — first assessment 2022). Last reviewed 2026-05-31.

Master this Topic

Worked examples, formulae, definitions and the mistakes examiners flag — everything you need to push from a pass to an A*.

Take this whole topic with you

Download a branded revision sheet — worked examples, formulae, definitions and common mistakes for Demand, ready to print or save as PDF.

Step-by-step worked examples — Demand

Step-by-step solutions to past-paper-style questions on demand, written exactly the way a tutor would explain them at the board.

1Movement vs shift
Building confidence• shifts
Question
For each event, state whether the demand curve for coffee shifts or shows a movement, and in which direction: (a) coffee price falls; (b) average income rises; (c) tea price rises (substitute). (3 marks)
Step-by-step solution
1. Step 1
  (a) MOVEMENT along the demand curve — extension downward, quantity demanded rises.
2. Step 2
  (b) SHIFT right (if coffee is a normal good) — demand rises at every price.
3. Step 3
  (c) SHIFT right — tea is a substitute, more expensive tea pushes consumers to coffee.
Answer
(a) movement (extension); (b) shift right; (c) shift right.
2Substitute or complement?
Getting started• related goods
Question
Classify each pair as substitutes or complements: (a) tea and coffee; (b) printers and ink cartridges; (c) iPhone and Android phones. (3 marks)
Step-by-step solution
1. Step 1
  (a) Substitutes — one replaces the other.
2. Step 2
  (b) Complements — used together.
3. Step 3
  (c) Substitutes — competing products.
Answer
(a) substitutes; (b) complements; (c) substitutes.
3Inferior good demand
Stretch• inferior good
Question
Explain why demand for instant noodles might fall as average income rises in a country. (3 marks)
Step-by-step solution
1. Step 1
  Instant noodles are an INFERIOR good — demand falls as income rises.
2. Step 2
  As people get richer, they substitute toward higher-quality / more varied food.
3. Step 3
  Demand curve for noodles shifts LEFT — less demanded at every price.
Answer
Inferior good — income rises shift demand left as consumers buy preferred substitutes.

Key Definitions and Keywords — Demand

Definitions to memorise and the exact keywords mark schemes credit for demand answers — sharpened from recent examiner reports for the 2026 IB DP Economics SL sitting.

Demand
Examiner keyword
Quantity of a good or service that consumers are willing and able to buy at each price over a given period.
Law of demand
Examiner keyword
As price rises, quantity demanded falls, ceteris paribus (downward-sloping demand curve).
Substitute / complement
Examiner keyword
Substitute = one good replaces the other in use. Complement = goods used together.

Common Mistakes and Misconceptions — Demand

The traps other students keep falling into on demand questions — taken from recent IB DP Economics SL examiner reports and mark schemes — and how to avoid them.

✕Calling a price change a 'shift' of the demand curve.
Why it happens
Confusing terminology.
How to avoid it
A change in the good's own price causes MOVEMENT along the curve. SHIFTS come from non-price determinants only.
✕Treating demand as 'what consumers want'.
Why it happens
Everyday usage.
How to avoid it
Demand = willing AND ABLE to buy. Wishes without purchasing power don't count.
✕Reversing substitute/complement effects.
Why it happens
Forgetting direction.
How to avoid it
Substitute price ↑ → demand for THIS good ↑ (consumers switch). Complement price ↑ → demand for THIS good ↓ (pair is now more expensive).

Past paper style quiz

Get a report showing which sub-topics you've nailed and which ones still need work.

Demand — frequently asked questions

The things students keep getting wrong in this sub-topic, answered.

Demand

Short Study Notes in the form of Slides

Short Study Notes — Demand

Detailed Notes

What you’ll learn

How it’s examined

1Movement vs shift

2Substitute or complement?

3Inferior good demand

Demand

Law of demand

Substitute / complement

✕Calling a price change a 'shift' of the demand curve.

✕Treating demand as 'what consumers want'.

✕Reversing substitute/complement effects.

Past paper style quiz

Demand — frequently asked questions