Question

Explain the difference between an increase in demand and an increase in quantity demanded. Draw separate graphs of each to help support your answer. (Be sure you have addressed why each of these changes have occurred

Answer 1

When we talk about change in quantity demanded, it mainly represents the movement along the current demand curve. But when it comes to change in demand, it results in the shifting of the entire demand curve either upward or downward depending upon the factor contributing to it.

The change in quantity demanded is mainly resulted when there is a change in price .

While the change in demand results due to following five factors:-

·         The price of the good or service.

·         Prices of related goods or services. These are either complementary (purchased along with) or substitutes (purchased instead of).

·         Income of buyers.

·         Tastes or preferences of consumers.

·         Future Expectations.

The differences between these two are shown in the figure below with the help of demand curve.

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