Question

Give an example of something that would cause a change in the demand for a product and an example of something that would cause a change in the quantity demanded of that product. Be sure to state how each would be shown on a demand curve graph.

Answer 1

Ans) Quantity demanded is the amount that buyers demand at a particular price. The sole reason for change in quantity demanded is the price of product itself. It causes movement along the curve. An increase in price will cause upward movement along the curve while a decrease in price will cause downward movement along the curve.

Whereas, the demand is the overall demand at different prices. There can be various reasons for change in demand. For eg- change in income, change in number of buyers, change in consumer preference etc. It causes shift in the demand curve. An increase in demand will cause rightward shift while a decrease in demand will cause leftward shift.

Lets take example of h&m clothes. A change in price of h&m clothes itself will cause movement along the curve. While sale on zara, change in income of buyers etc will cause shift in demand curve.