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Consider and explain a movement along the demand curve, then consider and explain a change/shift in the demand curve
Consider and explain a movement along the demand curve, then consider and explain a change/shift in the demand curve. What is the difference?
Expert Solution
"Movement" and "shift" in demand curve are different, but related concepts. When a change occurs along the demand curve, it is called a "movement". It is represented by changes in both price and quantity demanded of a good. For instance, an increase in price will cause the quantity demanded demanded to decrease, and vice versa. This is consistent with the law of demand. Movement along the demand curve is only caused by a change in the price of a good.
A shift in demand curve, on the other hand, occurs when the quantity demanded changes, irrespective of the price. A shift in demand curve is caused by a change in other factors (such as consumer expectations, seasons, a change in consumer income) other than price. A rightward shift and leftward shift in demand curve reflect an increase and a decrease in demand, respectively.
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