Chapter 14: Problem 500

What is the difference between a change in demand and a change in quantity demanded?

Short Answer

Expert verified

The difference between a change in demand and a change in quantity demanded lies in the fact that a change in demand refers to a shift in the entire demand curve due to factors other than price, such as consumer preferences, income levels, or the price of related goods, while a change in quantity demanded refers to movement along the existing demand curve as a direct result of price changes.

Step by step solution

Definition of Change in Demand

A change in demand refers to the shift in the entire demand curve, which represents a change in consumer behavior due to factors other than the price of the product. This can be caused by factors such as changes in consumer preferences, income levels, or the price of related goods. When demand increases, the demand curve shifts to the right, and when demand decreases, the demand curve shifts to the left.

Definition of Change in Quantity Demanded

A change in quantity demanded refers to the movement along the demand curve in response to a change in the price of a product. If the price of the product increases, the quantity demanded decreases, and when the price of the product decreases, the quantity demanded increases. In this case, there is no shift in the demand curve – rather, there is movement along the same demand curve.

Factors Affecting Change in Demand

Some factors that can cause a change in demand include: 1. Consumer preferences: If a product becomes more popular or less popular due to trends or changes in taste, this can cause a change in demand. 2. Income: If consumer income levels change, this can cause a change in demand as consumers may have more or less money to spend on certain goods. 3. Price of related goods: If the price of related goods (such as substitutes or complements) changes, this can affect the demand for the good in question.

Factors Affecting Change in Quantity Demanded

The primary factor that affects a change in quantity demanded is the price of the product. As mentioned earlier, an increase in price will cause a decrease in quantity demanded, while a decrease in price will cause an increase in quantity demanded.

Key Difference between Change in Demand and Change in Quantity Demanded

The key difference between a change in demand and a change in quantity demanded is that a change in demand refers to a shift in the entire demand curve, while a change in quantity demanded refers to movement along the existing demand curve. Changes in demand are caused by factors other than price, while changes in quantity demanded are a direct result of price changes. In summary, understanding the difference between a change in demand and a change in quantity demanded is essential in understanding how various factors affect consumer behavior and the overall demand for a product in the marketplace.