Movement and Shift in Demand Curve

Movement in demand curve:

Movement along the demand curve shows the change in both the factors i.e. the price and quantity demanded, from one point to another. Other things remaining same, when there is a change in the quantity demanded due to the change in the price of commodities, there will be movement of the demand curve. The movement along the curve can be in any of the two directions:

a) Upward Movement: It shows contraction of demand. i.e, a fall in demand observed due to price rise.

b) Downward Movement: It shows expansion in demand, i.e. demand for the product or service goes up because of the fall in prices.

Shift in Demand Curve:

A shift in the demand curve displays changes in demand at each possible price, relating to change in one or more non-price determinants such as the price of related goods, income, taste & preferences and expectations of the consumer. Whenever there is a shift in the demand curve, there is a shift in the equilibrium point also. The demand curve shifts in any of the two sides:

a) Rightward Shift: It represents an increase in demand, due to the favorable change in non-price variables, at the same price.

b) Leftward Shift: This is an indicator of a decrease in demand when the price remains constant but owing to unfavorable changes in determinants other than price.



In the above graph, the movement from point A to B is movement of demand curve whereas the movement of demand curve from D to D1 ( A to C) and D to D2 is the shift in demand curves.

Facors causing shift in demand:

1. Change in price of related goods.
2. Change in consumer incomes
3. Change in consumer tastes and fashion.
4. Technological progress.
5. Change in size and composition of the population.
6. Change in distribution of income.
7. Taxation policy
8. Change in real income
9. Future expectations of price