You should be familiar with the graph representing the demand curve. Remember, the curve represents the relationship between the price of a good and the quantity that consumers demand of that good at that price. Any demand curve can be read in either of two ways: how much will people pay for a given quantity or how much will people buy at a given price.

Let's show that it does not matter how we look at the shift in the demand curve. They both result in the demand curve shifting in exactly the same way to the same position. Look at point A.

1. How much do people demand at point A ?
2. How much will people pay at point A ?
3. Now suppose something happens to increase the demand for this good, implying people want more of the good at any price. Suppose the price stays at 5, which way does the curve shift ?
4. According to the new demand curve, how much of the good will people buy if the price is 5 ?
5. Now instead of saying people would demand more of this good, suppose we said the increase in demand meant people would pay more for the same amount of the good. In other words, suppose the quantity stays at 5, but people will pay more than 5 for those goods. Which way does the curve shift? Upward? Rightward ?
6. At the new demand curve, how much will people pay for 5 units of the good ?
7. Does it matter if we say the curve shifts right or the curve shifts up ?