Shifts in Demand
Unit 2 · Lesson 2.5 · Last updated June 2026
A 45-minute lesson where students learn the INSECT demand shifters, practice shifting the demand curve, and use shortage and surplus to explain how markets reach a new equilibrium.
Overview
In this lesson, students are introduced to the major shifters of demand. Students practice shifting the demand curve in the product market model and explain how shortages and surpluses result in a new market equilibrium.
Learning Objectives
- Identify shifters of the product demand curve and determine the appropriate shift given a scenario.
- Use the concepts of shortage and surplus to explain the change in the market equilibrium price and equilibrium quantity that results from a shift of the product demand curve.
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Materials
- Instruction Slides (display during class period)
- Student Handout pp. 4–7 (1 copy per student)
- Retrieval Practice p. 8 (1 copy per student)
- KEY Retrieval Practice p. 9 (1 copy for educator use)
Lesson Sequence
Slides 2–5
- Display Slide 2. Tell students to consider the activator question on the slide. After about 15 seconds, instruct students to share their responses with a partner. (Additional educator tips and suggested answers are in the notes section throughout Instruction Slides.)
- Progress through Slides 3 and 4. Briefly review what students have already learned about the law of demand, the law of supply, and the corresponding movements along the supply and demand curve. Identify that in this lesson students will learn what causes the entire demand curve to shift and how to represent that change in the product market model. Click to demonstrate shifts in the product market model on Slide 4.
- Display Slide 5. Explain the learning objectives for students.
Slides 7–43
- Progress through Slides 7–9 to explain shifts of the demand curve.
- Proceed to Slide 10. Pause for 30 seconds and direct students to sketch graphs and/or write notes regarding the definition of a shift in demand on their handout.
- Advance to Slide 11. Introduce the acronym INSECT to support students' memory of the factors responsible for shifting demand.
- Progress through Slides 12–14. Guide students through the first 2 shifters, pausing between each to allow students 30 seconds to generate their own examples. Students can draw pictures and/or jot notes on their handout. Ask for 1 or 2 examples to share with the class.
- Display Slide 15. Call on a student to supply an example of when the number of buyers might increase. Use that student-generated example and a whiteboard (or document camera) to demonstrate how to build the initial model and illustrate the shift in demand. Tell students to replicate the steps on their handout as you narrate and model the process.
- Progress through Slides 16–21. Guide students through the remaining 4 shifters, pausing between each to allow 30 seconds for students to generate their own examples. Students can draw pictures, sketch graphs, and/or jot notes on their handout. Alert students to the stumbling blocks (as indicated by the yellow warning graphic on Slides 16 and 20): when students make mistakes in shifting demand, it is most often connected to substitutes and complements.
- Display Slide 22. Call on a student to supply an example of when a change in taste might result in a change in demand. Use that student-generated example and a whiteboard (or document camera) to demonstrate how to build the initial model and illustrate the shift in demand. Tell students to replicate the steps on their handout as you narrate and model the process.
- Display Slide 23. Reinforce the use of the INSECT acronym. Click to reveal the remaining text and remind students that a change in the price of the product in question will never result in a shift of the demand curve — a change in a given product's price only results in movement along the demand curve.
- Proceed to Slide 24. Tell students to discuss with a peer which shifter they feel most confident about and least confident about. Students will return to whichever factor has a "!" next to it in Step 21.
- Progress through Slides 25–26. Tell students to think back to the Coffee Market Simulation and explain that the example will be used to consider how a shift in demand results in a price change.
- Proceed to Slide 27 and allow students a moment to read the scenario. Click to reveal the remaining text and tell students to discuss their response with a partner.
- Advance to Slide 28. Tell students to replicate the steps on their handout as you narrate and model the process. Create the model and illustrate the shift in demand on a whiteboard (or document camera), demonstrating how a shift in demand ultimately results in a new market equilibrium. (Use Slide 29 to support your explanation as needed.)
- Display Slide 30. Allow students 30 seconds to discuss the scenario and question with 1 or 2 peers. Create the model and illustrate the shift on a whiteboard (or document camera). (Click to reveal the model on Slide 29 as needed to illustrate the role of shortages in bringing the market back to equilibrium after an increase in demand.) Click to reveal the explanation in the blue box.
- Display Slide 31. Use the information on the slide to explain how a shift in demand results in a new equilibrium price and quantity.
- Proceed to Slide 32. Allow students 30 seconds to discuss the PlayStation 5 scenario with 1 or 2 peers. Create the model and illustrate the shift on a whiteboard (or document camera). (Click to reveal the model on Slide 31 as needed to illustrate the role of surpluses in bringing the market back to equilibrium after a decrease in demand.) Click to reveal the explanation in the red box.
- Display Slide 33. Use the information on the slide to explain how a shift in demand results in a new equilibrium price and quantity.
- Display Slide 34. Instruct students to discuss with a partner and then fill in the blanks in the "Sum It Up" section of their handout. Remind students to reference "Important Terms" if they are struggling.
- Progress through Slides 35–36. Students complete practice questions 1–8 on Student Handout. For question 8, students create their own scenario using the shifter they identified as feeling least confident about in Step 12. Tell students that their scenarios will be used in Lesson 2.7 — they must check their self-generated scenarios for accuracy with you or with a peer.
- After 10 minutes, discuss the solutions to questions 1–7 using Slides 37–43. If the class needed more support during the practice portion, Retrieval Practice can be assigned as homework.
Slides 44–45
- Progress through Slides 44 and 45. Direct students to put their notes away (or collect them if you plan on checking their scenario from Step 21). Tell students to keep Student Handout somewhere they will be able to easily find it.
- Distribute 1 copy of Retrieval Practice to each student and allow students 3 minutes to work through the 3 scenarios.
- Collect Retrieval Practice and provide feedback using the KEY Retrieval Practice.
Aligned Standards
Voluntary National Content Standards in Economics
Standard 4 Markets
What Educators Are Saying
I really liked the worksheet that allowed students to practice the shifts. It was a good mix of shifts and movements which allowed my students to stretch their thinking. In the past I have strictly taught demand separately and this sheet incorporated equilibrium and supply without having to teach it. The ideas of Ep and Eq allowed me to challenge students and preview future topics.
High School Economics Teacher, Connecticut
The graphing practice! I love having plenty of opportunities to have students practice graphing. This is a great intro to demand shifters! I love that there are examples of the shifters with areas to graph them.
High School Economics Teacher, South Carolina
I would definitely use this again since I appreciated the relevant, realistic examples.
High School Economics Teacher, Wisconsin