Movements Versus Shifts
The demand curve is a two-dimensional depiction of the relationship between price and quantity demanded. Movements along the curve occur only if there is a change in quantity demanded caused by a change in the good's own price. A shift in the demand curve, referred to as a change in demand, occurs only if a non-price determinant of demand changes. For example, if the price of a complement were to increase, the demand curve would shift leftward reflecting a decrease in demand. Conversely, a rightward shift in the demand curve reflects an increase in demand. The shifted demand curve represents a new demand equation.
Movement along a demand curve due to a change in the good's price results in a change in the quantity demanded, not a change in demand. A change in demand refers to a shift in the position of the demand curve in two-dimensional space resulting from a change in one of the other arguments of the demand function.
Read more about this topic: Demand
Famous quotes containing the words movements and/or shifts:
“The novel is not “a crazy quilt of bits”; it is a logical sequence of psychological events: the movements of stars may seem crazy to the simpleton, but wise men know the comets come back.”
—Vladimir Nabokov (1899–1977)
“I have rather a strange objection to talking from the back platform of a train.... It changes too often. It moves around and shifts its ground too often. I like a platform that stays put.”
—Woodrow Wilson (1856–1924)