A shift of demand comes from something other than the good's own price (Change in Demand vs Change in Quantity Demanded). Economists keep a short list of what those things are.
Key idea
Demand shifts when buyers' tastes, incomes, expectations (about future prices or incomes) or numbers change, or when prices of related goods change (the next lesson). For a normal good, higher income raises demand; for an inferior good, higher income lowers it. "Inferior" is a technical word for goods people buy less of as they get richer, not a judgment of quality.
Why it works
Each item changes how much buyers want at every price. With more income, people can afford more of most things, so demand for normal goods rises. But with more income some people also switch away from goods they bought to save money, such as long-distance bus trips instead of flying, or store brands instead of name brands; for those buyers, those goods are inferior. Expectations work through timing: if buyers expect the price to rise next month, they buy more now, so today's demand rises.
Worked example: Which way does demand shift?
What happens to demand for each good? (a) Movie tickets in a city whose population grows. (b) Store-brand cereal when incomes rise, for buyers who see it as inferior. (c) Gasoline today when drivers expect a big price rise next week.
- (a) More buyers: demand increases, a shift right.
- (b) Inferior for these buyers: higher income, demand decreases, a shift left.
- (c) Buy now before the rise: today's demand increases.
Answer: (a) right, (b) left, (c) right.
Common mistake
Assuming more income raises demand for every good. It does for normal goods, and lowers it for inferior ones. And the same good can be normal for one buyer and inferior for another. Check: ask "when these buyers get richer, do they buy more of this, or trade it for something they like better?"
One trap: a change in the good's own expected price shifts today's demand, but a change in the good's current price never does. The expected future price is not on the axis; today's price is.