4.Describe the differences between a movement along a demand curve and a shift in demand curve
2007-02-05 11:28:08 · 2 answers · asked by Anonymous in Social Science ➔ Economics
movement along the demand curve stems from changes in demand as a function of price.
A shift in the demand curve indicates a whole new demand curve.
For example, the demand for corn in going up due to its use in ethenol. When the quanity of corn used in ethenol production is factored into the over demand for corn, it will be a shift in demand.
However, if we have a bumper crop of corn and the price falls due to excess supply this is just movement along the existing demand curve
2007-02-05 12:39:18 · answer #1 · answered by Jerry 3 · 0⤊ 0⤋
Movements along the demand curve are reactions to only a change in price.
Anything else is a shift in a demand curve, which means at any and all prices the demand is different than it was before. eg Changes in tastes, changes in substitutes or complimentary goods, changes in income levels...
2007-02-05 19:34:30 · answer #2 · answered by JuanB 7 · 1⤊ 0⤋