What is the difference between a shift of the demand curve and movement along the demand curve? Make sure to explain what determinants can cause a shift and movement along the demand curve.
A movement along the demand curve is caused by changes in the price level, when everything else remians constant. When price level falls, there is downward movement along the demand curve. When price level rises, there is upward movement along the demand curve.
A shift of demand curve is caused by changes in non price factors like income, taste and preferences, price of related goods etc.
When there is positive change, for example a rise in income, demand curve shifts to the right.
Get Answers For Free
Most questions answered within 1 hours.