Question

stion Completion Status: QUESTION 11 Vhat is the difference(s), if any between movements along a given deamnd curve, and shifts of the marke emand curve? Explain and illustrate with examples. T T T Arial 3 (12pt) T . :-·-· Wordso Path: p

Answer 1

Answer:

Movement Along Demand curve:

A movement on the demand curve denotes a change in both price and quantity demanded from one point to another on the curve. This movement implies that the demand relationship remains consistent. Therefore, a movement along the demand curve will occur when the price of the good changes and the quantity demanded changes in accordance to the original demand relationship. In other words, a movement occurs when a change in the quantity demanded is caused only by a change in price, and vice versa.

Shift in Market Demand Curve:

A shift in a demand curve occurs when a good's quantity demanded changes even though price remains the same.Shifts in the demand curve imply that the original demand relationship has changed, meaning that quantity demand is affected by a factor other than price.For instance, if the price for a bottle of beer was $2 and the quantity of beer demanded increased from Q1 to Q2, then there would be a shift in the demand for beer because beer suddenly became the only type of alcohol available for consumption.

Shift in Demand D2 Di Q1 Q2 Quantity