Movement along Demand Curve and Shift in Demand CurveMovement along Demand Curve and Shift in Demand Curve

While Understanding the importance and analysis of a demand curve in the study of Economics requires a capacity to distinguish between the movement and shift of the demand curve. In this post, we’ll look at how to tell the difference between a Movement along Demand Curve and Shift in Demand Curve.

Movement along Demand Curve

A movement along a demand curve is caused by a change in price of the commodity, other things remaining the same. It is also called change in quantity demanded for the commodity. Movement is always along the same demand curve i.e., no new demand curve is drawn.

When change in demand is caused by change in price, then it is called extension or contraction in demand or change in quantity demanded.

Also Check: Law of Demand| Meaning,Definitions,Schedule & Assumptions

Extension in Demand

Other things remaining the same, when the quantity demanded for a commodity increases due to fall in price, it is called extension in demand. It is also known as the increase in quantity demanded. In this case, the demand curve remains the same. It does not change its position. The consumer moves downward along the same demand curve. The extension in demand is shown in the table:

Price(In Rs)Quantity (Units
45
210
Table of Extension in Demand

In the table 1.4, when price of the good is Rs. 4, the quantity demanded for the good is 5 units. When price falls to Rs. 2, the quantity demanded for the commodity extends to 10 units. Thus, there is extension in demand by 5 units. It can also be shown by the figure.

polotno 2023 11 11T144037.856
Extension in Demand
  • When the price rises from OP to OP”, the amount requested falls to OL. Furthermore, the demand curve is moving UPWARD.

DD is the demand curve of a commodity. When price of commodity is Rs. 4, the quantity demanded is 5 units. Consumer is on point A of the demand curve. When price falls to Rs. 2, the demand extends to 10 units. The consumer moves along the same demand curve from point A to point B. This movement from higher point to the lower point on the same demand curve is called extension in demand.

Also Check: Causes of Downward Sloping Demand Curve

Contraction in Demand

Other things remaining the same, when the quantity demanded for a commodity decreases due to rise in price, it is called contraction in demand. It is also known as the decrease in quantity demanded. In this case, the demand curve does not change its position. The consumer moves upward on the same demand curve.

Price(In Rs)Quantity (Units)
210
45
Table of Contraction in Demand

when per-unit price of a commodity is Rs. 2, the quantity demanded for that commodity is 10 units. When price rises to Rs. 4, the quantity demanded for the good contracts to 5 units. Thus, there is contraction in demand by 5 units. The contraction in demand is illustrated in figure .

polotno 2023 11 11T144120.279
Contraction in Demand
  • When the price falls from OP to OP’, the quantity requested rises to ON. In addition, the demand curve is moving downward.

DD is the demand curve of a commodity. When per unit price of a commodity is Rs. 2, the quantity demanded is 10 units and consumer is on point A of the demand curve. As price rises to Rs. 4, the quantity demanded contracts to 5 units. The consumer moves upward from point A to point B on the same demand curve. Movement from the lower point to the higher point on the same demand curve is called contraction in demand.

Also Check: Exceptions to the Law of Demand

Shift in Demand Curve (Change In Demand)

Demand curve shifts due to change in factors other than price of the commodity. When factors other than price change, there is increase or decrease in demand. It is also known as the change in demand. The other factors are price of related commodities, income of consumer, taste and preferences, habit, fashion, etc. A change in any of these factors causes shift in the demand curve. The shift in demand curve is shown by drawing new demand curve. There are two types of change in demand or shift in demand curve which are as follows:

Also Check: What is Demand ? 5 Types Of Demand in economics

Rightward Shift in Demand Curve

It refers to more demand at the same price due to favorable change in factors other than price of the commodity. In this situation, the initial demand curve shifts rightward. This increase in demand can be shown by the help of demand schedule and figure as follows:

Price (in Rs)Demand (units)
310
320
Table of Rightward Shift in Demand Curve (Increase in Demand)

The table 1.6 shows that when per-unit price is Rs. 3, quantity demanded for the commodity is 10 units. Even at the same price i.e., at Rs.3, due to the favourable change in the factors other than price, demand increases to 20 units. It is called increase in demand. It is explained clearly by the help of the figure.

polotno 2023 11 11T152252.996
Rightward Shift in Demand Curve

At price Rs. 3 per unit, the demand is 10 units. By price-demand relation, we get point A in figure. On the basis of point A, we draw initial demand curve, DD. When factors other than price (such as increase in income) change, the demand increases to 20 units at the same price Rs. 3. It is marked by point B. We draw new demand curve, D,D, on the basis of point B. Thus, this is the rightward shift in demand curve or increase in demand.

Also Check : What is Demand? Function,Difference between Desire and Demand.

Leftward shift in demand curve (Decrease in Demand)

It refers to less demand at the same price due to unfavourable change in factors other than price of the good. In this situation, the initial demand curve shifts towards left. It can be shown by the help of the demand schedule and figure below:

Price (in Rs)Demand (units)
310
35
Table of Leftward shift in demand curve (Decrease in Demand)

As shown in the table 1.7, at price Rs. 3, 10 units of a commodity are purchased The quantity purchased decreases to 5 units at the same price Rs. 3 per unit because of unfavorable change in factors other than price of the commodity.

polotno 2023 11 11T154920.039
Leftward shift in demand curve

In the figure 1.7, initial demand is 10 units at price Rs. 3 per unit. It is indicated by point A in figure. On the basis of point A, we draw demand curve, DD. The demand decreases to 5 units at the same price Rs. 3 per unit due to unfavourable change in other factors (such as decrease in income). New demand curve, DD, is derived on the basis of point B in figure. Thus, this is the leftward shift in demand curve or decrease in demand.

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