Difference Between Movement and Shift in Demand Curve

Movement vs Shift in Demand Curve
 

Movement along the demand curve and shift in the demand curve are concepts that are closely studied in economics when discussing the forces of demand and supply. The demand curve illustrates the total quantity demand for a product at varying prices. The movement along the demand curve and the shift in the demand curve are caused by very different reasons. The article explains both these concepts and shows the differences between movement and shift in demand curve and the reasons behind such movements and shifts.

Movement in Demand Curve

A movement in the demand curve is the change that happens along the demand curve. When there is a movement along the demand curve this means that there has been a change in the price and quantity demanded. A movement can only be a result of a price change and a change in quantity demanded as a response to this price change. Since the movement is always along the demand curve, the demand relationship between price and quantity will not change. If there is a movement towards the right, then this means that the price has fallen and quantity demanded has increased with cheaper prices. If there is a movement towards the left on the demand curve, then this means that the price has increased and quantity demanded has, therefore, reduced.

Shift in Demand Curve

A shift in the demand curve occurs when the demand curve actually moves to the right or left. Such a change will happen when the quantity demanded increases or decrease without a change in price. A shift in the demand curve means that the demand relationship between the price and quantity has changed and that there are other factors that are affecting the quantity demanded besides the price. If the demand curve shifts to the right, then this means that quantity demanded at the current price has increased, and if there is a shift to the left, then it means that quantity demanded has decreased at the current price. For example, if the price for a bottle of red wine was $10 per bottle and the quantity demanded shifted from 100,000 bottles per month to 200,000 bottles per month, this would cause a shift in the demand curve to the right. Such an increase in demand could be because of seasonal festivities such as thanksgiving in the month of November.

What is the difference between Movement and Shift in Demand Curves?

Shifts in demand curves and movements along the demand curve occur for very different reasons. A movement along the curve would be caused by a change in price, which will cause a change in the quantity demanded. If the price increases, then there will be a movement to the left of the demand curve causing a decrease in quantity demanded and, if the price decreases, then there will be a movement to the right causing an increase in quantity demanded. A shift in the demand curve would be caused by a change in the quantity demanded without a change in price. A shift in the demand curve is usually caused when a consumer’s idea of the product’s worth or value changes. Reasons for such shifts could be changes in customer expectations, increase or decrease in income, changes in the prices of other goods or changes in fashion and trends.

Summary:

Movement vs Shift in Demand Curve

• Movement along the demand curve and shift in the demand curve are concepts that are closely studied in economics when discussing the forces of demand and supply.

• If there is a movement along the demand curve, then that means that there has been a change in the price and quantity demanded.

• If the price increases, then there will be a movement to the left of the demand curve causing a decrease in quantity demanded and, if the price decreases, then there will be a movement to the right causing an increase in quantity demanded.

• A shift in the demand curve occurs when the demand curve actually moves to the right or left. Such a change will happen when the quantity demanded increases or decrease without a change in price.

• A shift in the demand curve is usually caused when a consumer’s idea of the product’s worth or value changes.