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:
“Justice begins with the recognition of the necessity of sharing. The oldest law is that which regulates it, and this is still the most important law today and, as such, has remained the basic concern of all movements which have at heart the community of human activities and of human existence in general.”
—Elias Canetti (b. 1905)
“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)