Editing Induced demand (section)

{{Short description|Phenomenon in which supply increases lead to a cycle of increased consumption}}
{{Other uses}}
[[File:Supply-demand-right-shift-supply.svg|thumb|When the [[Supply (economics)|supply curve]] shifts from S1 to S2, the equilibrium price decreases from P1 to P2, and an increase in quantity demanded from Q1 to Q2 is induced.]]
In economics, '''induced demand''' &ndash; related to '''latent demand''' and '''generated demand'''<ref name=benjamin>Schneider, Benjamin (September 6, 2018) [https://www.citylab.com/transportation/2018/09/citylab-university-induced-demand/569455/ "CityLab University: Induced Demand"] ''[[CityLab (web magazine)|CityLab]]''</ref> &ndash; is the phenomenon whereby an increase in supply results in a decline in price and an increase in consumption. In other words, as a good or service becomes more readily available and mass produced, its price goes down and consumers are more likely to buy it, meaning that the quantity demanded subsequently increases.<ref>{{cite news |last1=Mann |first1=Adam |title=What's Up With That: Building Bigger Roads Actually Makes Traffic Worse |url=https://www.wired.com/2014/06/wuwt-traffic-induced-demand/ |publisher=Wired |date=17 June 2014}}</ref> This is consistent with the economic model of [[supply and demand]].

In [[transportation planning]], induced demand, also called "'''induced traffic'''" or consumption of road capacity, has become important in the debate over the expansion of [[transport]]ation systems, and is often used as an argument against increasing roadway traffic capacity as a cure for congestion. Induced traffic may be a contributing factor to [[urban sprawl]]. City planner [[Jeff Speck]] has called induced demand "the great intellectual black hole in city planning, the one professional certainty that every thoughtful person seems to acknowledge, yet almost no one is willing to act upon."<ref name=speck>{{harvnb|Speck|2012|p=80}}</ref>

The inverse effect, known as '''reduced demand''', is also observed.<ref>{{cite news |last1=Steuteville |first1=Robert |title=Reduced demand is just as important as induced demand|url=https://www.cnu.org/publicsquare/2021/03/19/reduced-demand-just-important-induced-demand |publisher=Congress For The New Urbanism|date=19 March 2021}}</ref>