Managerial Economicsintermediate
Explain the difference between a change in quantity demanded and a change in demand.
Answer
A change in quantity demanded is movement along an existing demand curve caused by a change in the good's own price. A change in demand is a shift of the whole curve caused by a change in a non-price determinant, such as income, tastes, or the price of a related good.
Explanation
### The concept
A demand curve shows quantities consumers are willing and able to buy at different own prices during a period. If the good’s own price changes, the consumer moves to another point on the same curve; this is a change in quantity demanded. If income, tastes, or the price of a substitute or complement changes, the quantities desired at different own prices change. The entire curve shifts, which is a change in demand. This distinction matters because the two changes have different causes.
### What a good answer covers
- Identify own price as the cause of movement along the curve.
- Identify non-price determinants as causes of curve shifts.
- Give at least one example of a demand shifter.
- Use the terms “quantity demanded” and “demand” distinctly.
### Remember
Own-price change: move along. Other demand determinant: shift.
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