Question

Your friend John has never learned Economics. He wants to know the differences between a change in the quantity demanded and a change in demand. He also wants to know the differences between a change in the quantity supplied and a change in supply.

a) Explain to John the differences between a change in the quantity demanded and a change in demand.

b) Explain to John the differences between a change in the quantity supplied and a change in supply.

Answer 1

a) A change in quantity demanded is the movement along the demand curve which occurs due to change in factor such as the price of the good whereas a change in demand refers to the shift of the demand curve due to factors other than the change in price

The movement along the demand curve shows that when price increases, the demand decreases and when price decreases then the demand increases as shown in graph a below.The factors which cause a shift in the demand curve are the price of the substitutes, the income of the consumer, consumers expectations etc as when the income of consumers increases,the quantity demanded increases and when price of substitutes decreases the consumers demand for the good decreases as shown in graph b below.

b) A change in quantity supplied is the movement along the supply curve which occurs due to change in factor such as the price of the good whereas a change in supply is the shift of the supply curve which occurs due to change in factors other than the change in the price of the good.

The movement along the supply curve shows that when the price increases the producers would be willing to supply more but when price decreases the producers would supply less as shown in graph a below.The factors which cause a shift in the supply curve are technological change, cost of production, the number of sellers etc as when cost of production increases,the supply decreases and when there is a favorable change in technology,the supply increases as shown in graph b below.