How does the demand curve change if there is an increase in the quantity demanded?

1 Answer
Jul 7, 2015

Answer:

An increase in quantity demanded will result in a movement along a given demand curve, whereas an increase in demand will lead to a shift outwards of the entire demand curve.

Explanation:

A change in quantity demanded refers to a response in quantity when price changes, for example, when price falls, quantity demanded will increase, The movement is along the same demand curve. But a change in demand relates to the entire relationship between demand and other factors that affect demand, for example, tastes, income etc. For example, when income increases, assuming other factors are kept constant, the quantity demanded at any one price increases and the entire demand curve will shift outwards to the right.

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When Price is P’, quantity demanded is Q’. When price falls to P, quantity demanded increased to Q. The movement from Q’ to Q is an increase in quantity demanded.

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When demand curve is dd’, at price P, quantity demanded is Q. Then when income increases, all other things remaining constant, the demand curve shifts outwards to DD’. At the same price P, the quantity demanded on the new demand curve is now Q’. The change in demand from Q to Q’ is an increase in demand.