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Question
Distinguish between “movement along the demand curve” and shift of a demand curve.
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Solution
| Movement along the demand curve | Shift of a demand curve | |
| (i) | It consists of the extension of demand and the contraction of demand. | It consists of an increase in demand and a decrease in demand. |
| (ii) | Other things being equal, when there is a change in the price of a good, the resulting change in demand is defined as movements· along the demand curve. | When demand changes on account of factors other than a change in price is called a shift of a demand curve. |
| (iii) | The change in quantity demanded is shown on the same or original demand curve. | The change in demand is shown on the different demand curve. |
| (iv) | Extension of demand |
Increase in demand |
| (v) | Contraction of demand |
Decrease in demand |
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