Question

Explain the difference between change in quantity demanded and a shift in demand. What causes changes in quantity demanded? What causes a shift in demand?

Answer 1

We know that price and quantity demanded to have a negative relationship with each other. And the changes in the price leads to a change in the quantity demanded of the good. Thus a change in quantity demanded of a good leads to a movement along the demand curve due to which price increases/decreases with a decrease/ increase in demand. This is called a change in quantity demanded (that causes a movement along the same demand curve).

There are factors other than price that affect the demand of the goods too, like the income of the consumer, tastes and preferences of the consumer, the price of the substitute good, etc. Thus any change in the mentioned factors leads to a shift in the demand curve either up or down. For example, an increase in income will shift the demand curve to the right. This is called a shift in demand or change in demand.