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Explain why the difference between a shift in the demand curve and movement along the demand curve is so important
Explain why the difference between a shift in the demand curve and movement along the demand curve is so important.
Expert Solution
According to the law of supply, there is an inverse relationship between the price level and the quantity demanded of a product in the market i.e. Any alteration in the price level of the product will lead to a movement along the demand curve rather than shifting it. Where is on the other hand when there is any alteration in the determinant of demand except the price level of the product itself then it is expected to result in a shift in the demand curve. Therefore it can be concluded that the movement along the demand curve is solely price determinant whereas the shift in the demand curve is based upon other determinants of demand.
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