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Sunday, 6 January 2019

Shift in demand or change in demand

Shift in Demand or Change in Demand

Are you confused that what this term exactly means? After reading this article your doubt will be clear.

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Change in demand or shift in demand.

Firstly, I want to repeat the term again “Change in demand”. Now I want to write an another term “ change in quantity demanded”. What is the difference between these two terms?. Yes, you got it, When quantity demanded is used then it means demand is moving upward or downward on demand curve because own price of commodity is changing and other factors are remaining constant. Upward movement means contraction in demand when own price of commodity increases. Downward movement means contraction when own price of commodity decreases.

Change in demand means demand is changing due to change in other factors, own price remaining constant. It means increase in demand ( rightward or forward shift in demand curve ) or decrease in demand ( backward or leftward shift in demand curve ).

Finally, Increase in demand (due to other factors only ) means forward shift in demand whereas increase in quantity demanded ( due to price ) means downward movement on demand curve.

Decrease in demand means backward shift of demand curve and decrease in quantity demanded means upward movement on demand curve.

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