Answer to Question #193894 in Microeconomics for Tewodros simie

Question

Using a graph, explain carefully the difference between a movement along a demand curve and a shift in the demand curve

Answer 1

A movement on the demand curve signifies a transition in both price and quantity demanded from one point on the curve to the next. As a result, when the price of the good increases and the amount demanded changes under the original demand relationship, a movement along the demand curve occurs.

When the whole demand curve shifts to the right or left, it is called a shift in the demand curve. A rise in revenue, for example, means that people can afford to purchase more widgets at the same price. For the following reasons, the demand curve may change to the right: The price of a substitute good increased.