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Abstract
When a demand curve shifts in an imperfectly competitive industry, price, quantity, consumer surplus, and welfare may individually rise or fall. This breadth of possibilities contrasts sharply with the narrower and more predictable effects of either a demand shift in a competitive industry or a cost shift in either type of industry. Even under imperfect competition, however, the pattern of demand shift effects cannot be entirely arbitrary. A system of necessary and sufficient relationships among the changes is established. How profits change when demand shifts is of particular note. When the demand curve rises, profits may actually fall. As shown here, this possibility is unique to imperfect competition: profits always rise with demand under both perfect competition and perfect collusion. The demand shift case again also contrasts with the cost shift case, where imperfect competition is not a necessary ingredient in generating perverse profit effects.