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What do you understand by movement along the demand curve?

Economics Dec 13, 2020

What do you understand by movement along the demand curve?

Expert Solution

Movement along the demand curve is based upon the basic law of demand, which states that the demand of a product or service decreases when there is a rise in price and increases when there is a fall in price, with all other factors remaining constant.The demand schedule is defined from the demand curve. The movement along demand curve shows the inverse relationship between price and quantity of a commodity. Let us take the example of a soft drink. When the price of a soft drink is $2 a bottle, quantity purchased is 100 bottles. When the price decreases to $1, however, quantity purchased is 150 bottles. If the price of commodity increases, the quantity demanded falls, we say that there is fall in quantity demanded which shows the upward movement along the demand curve and when the quantity demanded increases due to price reduction there is a downward movement along the demand curve.

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