Question

Does a change in consumers' tastes lead to a movement along the demand curve or to a shift in the demand curve? Does a change in price lead to movement along the demand curve or to a shift in the demand curve? Explain your answers.

Answer 1

SOLUTION:-

* The change in consumers' tastes leads to a change in quantity demanded at all given prices. Therefore, here is a change in the demand schedul and the entre demand curve shifts.

* However, wwhen there is a change in price, the quantity demanded goes up r down in the same demand curv. So, there is a movement along the deand curve.

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