Bus fares rise, taxis fill up

Demand shifts right. Supply stays put.

Buses and taxis are substitutes, different ways to make the same trip. When bus fares rise, some riders switch, and they want more taxi rides at every taxi fare. Demand for taxi rides shifts right. Taxi companies' costs are unchanged, so supply stays put.

Price rises and quantity rises.

Common mistake. A common mistake is to shift taxi supply, or to shift demand left because 'fares went up.' The fare that rose is the bus fare, a substitute's price, and a higher substitute price raises demand for taxis.