Posted by Anjali Kaur on Aug 11, 2020

Difference between a movement along the demand curve and shift in demand

We have gone through in detail the change in demand and the change in quantity demanded. I was getting some requests to provide a proper difference between a movement along the demand curve and a shift in demand. I also plan to discuss the extension of demand and the contraction of demand. In the end, I will also provide a proper difference between the increase in demand and the decrease in demand. I know, it’s a lot to process, but have faith, it’s easy. Let’s learn.

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Movement Versus Shift in Demand Curve

Movement Along the Demand Curve	The shift in the Demand
When the demand for commodity changes due to a change in its price, keeping other things constant.	When the demand of commodity changes due to change in other factors affecting demand rather than the price of a commodity.
It is also known as a change in quantity demanded.	It is also known as a change in demand.
The reason for a change in quantity demand is due to a change in the price of the commodity itself.	The reason for a change in demand is due to the change in other factors than price. Like, changes in related goods price, income change, tastes and preferences, and future expectations.
It is of two types: Expansion of demand Contraction of demand	It is of two types: Increase in demand Decrease in demand
Expansion of demand is caused by a fall in the price of a commodity, keeping other things constant.	An increase in demand causes a rightward shift of the demand curve due to an increase in income in the case of normal goods, an increase in the price of substitute goods, a decrease in the price of complementary goods.
Contraction of demand is caused by rising in the price of a commodity, keeping other things constant.	The decrease in demand is causing a leftward shift of the demand curve due to a decrease in income in the case of normal goods, a decrease in the price of substitute goods, increase in the price of complementary goods.

Extension of demand versus Contraction of demand

Extension of demand	Contraction of Demand
It is the rise in demand due to a fall in the price of a commodity itself, keeping other things constant.	It is a fall in demand due to a rise in the price of a commodity, keeping other things constant.
It results in a downward movement along the demand curve.	It results in upward movement along the demand curve.
Demand curve:	Demand curve:

Increase in demand Versus Decrease in demand

Increase in Demand	Decrease in Demand
It causes a rightward shift in the demand curve.	It causes a leftward shift in the demand curve.
Increase in the income of the consumer in the case of normal goods.	Decrease in the income of the consumer in the case of normal goods.
Increase in the price of substitute goods.	Decrease in the price of the substitute goods.
Fall in the price of complementary goods.	Rise in the price of complementary goods.
Changes in tastes and preferences in favor of the commodity.	Changes in tastes and preferences against the commodity.
It is also known as the Rightward shift in the demand curve.	It is also known as the Leftward shift in the demand curve.

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You can read more related posts:

1. Introduction to Economics
2. What do you mean by an economy?
3. What are the Central problems of the economy?
4. Production Possibility Curve
5. What causes PPC to shift?
6. What does the opportunity cost mean?
7. The point on and off the Production Possibility Curve

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