Question 2 (b)
Movement along a demand curve and shift of a demand curve
6 marks
- Time to write
- About 12 minutes
Question
Question 2 (b) · 6 marksExplain the movement along the demand curve and the shift in the demand curve.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- ExplainEach point stated, then explained in a line or two.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 Movement along: cause (own price), expansion and contraction, illustration 2½ marks 4 min
- 2 Shift: causes (non-price factors), increase and decrease, illustration 2½ marks 4 min
- 3 Difference stated 1 mark 2 min
- Check: every ask answered, key terms underlined 1 min
Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks. End with step 3 in a line or two.
Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
A demand curve shows the quantity of a good buyers want at each price, drawn with every other influence on demand held constant: income, tastes and preferences, the prices of related goods, and the number of buyers. Whether a change shows up as a movement along the curve or as a shift of the whole curve depends on which of these influences changes.
Movement along the demand curve.
- Cause: only a change in the good's own price, everything else unchanged. The buyer moves from one point to another on the same curve, and the quantity demanded changes.
- Contraction (upward movement): a rise in price lowers the quantity demanded. Our own example: when the price of a plate of momos at a stall rises from ₹60 to ₹80, a student buys 3 plates a week instead of 5, moving up the same curve.
- Expansion (downward movement): a fall in price raises the quantity demanded; if the price falls back to ₹60 she again buys 5 plates.
- A table of the movement:
| Price of a plate (₹) | Plates a week | Change |
|---|---|---|
| 60 | 5 | starting point |
| 80 | 3 | contraction (move up the curve) |
| 60 | 5 | expansion (move down the curve) |
- Cause: a change in any factor other than the good's own price: income, tastes and preferences, prices of substitutes and complements, expectations or the number of buyers. The whole curve moves, so at every price a different quantity is demanded.
- Increase in demand (shift to the right): for example, the student's pocket money rises and she now buys 7 plates a week at ₹60 (and more than before at every other price). For a normal good a rise in income shifts the curve to the right; for an inferior good it shifts it to the left.
- Decrease in demand (shift to the left): for example, a new canteen opens with cheaper rolls, a substitute, so she buys only 2 plates at ₹60.
| Basis | Movement along the curve | Shift of the curve |
|---|---|---|
| What changes | the good's own price | income, tastes, related prices, buyers or expectations |
| What it is called | change in quantity demanded (expansion or contraction) | change in demand (increase or decrease) |
| On the diagram | from one point to another on the same curve | the whole curve moves right or left |
| At an unchanged price | the quantity demanded does not change | the quantity demanded is different |
Conclusion. A movement along the demand curve is caused by the good's own price alone; a shift of the curve is caused by a change in any other determinant of demand, so that buyers want a different quantity at every price.
Where the 6 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Movement along: cause (own price), expansion and contraction, illustration | 2.5 |
| 2 | Shift: causes (non-price factors), increase and decrease, illustration | 2.5 |
| 3 | Difference stated | 1 |
| Total | 6 |
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