Which of the following will cause the demand curve for a good to shift to the left? (1) An increase in the price of the good (2) A decrease in the price of a complementary good (3) An increase in the price of a complementary good (4) An increase in the price of a substitute good (5) An expectation of a tax cut

What “shift left” means for a demand curve

A leftward shift of the demand curve means demand decreases at every price. This happens because of a non-price determinant of demand (not the good’s own price).

Checking each option

1. Increase in the price of the good: this causes a movement along the demand curve (a lower quantity demanded), not a shift.

2. Decrease in the price of a complementary good: complements are used together, so a cheaper complement makes people want more of this good. Demand shifts right, not left.

3. Increase in the price of a complementary good: a more expensive complement reduces consumption of the bundle, so demand for this good falls. Demand shifts left.

4. Increase in the price of a substitute good: if a substitute gets more expensive, consumers switch toward this good, increasing demand. Shift right.

5. Expectation of a tax cut: typically increases expected future disposable income, which tends to raise current demand. Shift right (not left).

Final choice

Only (3) decreases demand and shifts the demand curve to the left.