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Frequently Asked Questions—Part 2
By : Lynn Huselton
Plano East Senior High
Plano, TX
Q.What is the difference between a change in quantity demanded and a change in demand?
A.A change in quantity demanded is the same as a movement along a demand curve. Only a rise or fall in the price of the item graphed will result in movement or a change in quantity demanded. When economists speak of a change in quantity demanded, or a movement along a demand curve, they are referring to a graph with just one demand curve.
When economists speak of A change in demand or a shift in demand they are referring to a graph with both an old and a new demand curve. The new curve will be plotted either to the left, a decrease in demand, or to the right, an increase in the demand, of the original curve. The decrease or increase in the demand curve is the result of changes in one of the 5 non-price determinants of demand. These non-price determinants are preference, income, number of buyers, expectations, and the price of related goods. Related goods refer to complements, things that go together like bread and butter and, substitutes, things used in place of each other like butter and margarine. A change in any of the non-price determinants will cause a new quantity demanded at each and every price. Note the two pneumonic devices along with the two graphic representations that can be used to enable students to remember the difference in a change in quantity demanded and a change in demand.
qd = f (price)
The mnemonic devices read as follows:
A change in quantity demanded is a function of a change in the price
of the item.
Movement or a change in quantity demanded
If the price of backpacks drops from price one to price two, there would be movement along and down the demand curve for backpacks from point A to point B. Also there would be an increase in the quantity demanded. This is movement along the curve or a change in the quantity demanded.
D
= f (PYNER)
A change in demand is a function of a change in preference, income, number of buyers, expectations, or the price of related goods.
Shift or a change in demand
If students decide that carrying a backpack will make them more appealing to the opposite sex, more students will carry backpacks. This increase in their preference will cause an increase in the quantity demanded of backpacks at each and every price. This causes a shift to the right in the demand and a new demand curve D2 to be plotted to the right of the existing demand curve D1. Note a shift always has two curves and a movement always has only one curve plotted on the graph.
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