Question

In your own words, explain the difference between a movement along the demand curve and a shift in demand. Then, provide an example from your own personal life where you have experienced each one.

Answer 1

Movement along the demand curve is the change in quantity demanded due to changes in price of the good itself.

Shift in demand is the change in demand curve due to changes in factors other than Price of the good. These factors can be income, price of substitute or complimentary good, taste, etc. At the same price you demand more or less than before the change in one of the factors.

Example- I was shopping in the mall for clothes, there i saw discount on one of the brands, I bought two of the shirts as I could get two shirts at the price of one. This is movement along the curve.

On the same day, one of the other brands had new arrival of new style shirts. I bought two of them immediately paid for both of them. This is an example of change in demand, factor playing the role is change in taste due to trend which increased my demand for shirts.