Equilibrium and Shifts of the Demand Curve The original equilibrium in the market for cotton is at E1, at the intersection of the supply curve and the original demand curve, D1. A rise in the price of polyester, a substitute, shifts the demand curve rightward to D2. A shortage exists at the original price, P1, causing both the price and quantity supplied to rise, a movement along the supply curve. A new equilibrium is reached at E2, with a higher equilibrium price, P2, and a higher equilibrium quantity, Q2. When demand for a good or service increases, the equilibrium price and the equilibrium quantity of the good or service both rise.