Budgets tighten but the necessity still sells

Step by step

1. 1

   This is a position shift, not a slope change: the whole curve moves.

2. 2

   A cost-of-living squeeze leaves households with less to spend across the board.

3. 3

   Demand shifts left: at every price, buyers want less than they did.

4. 4

   Note the difference from an elasticityelasticityHow strongly one variable responds to another, usually quantity's percentage response to a price change. change. Here willingness to pay fell, but price responsiveness did not.

Where this shows up

Examiners ask this as: necessity, inelastic, cost of living, budget squeeze, demand falls.