With the aid of diagrams, explain what is meant by a change in: (a) the...

Explanation

(a)Change in quantity demanded is any movement along the same demand curve, whether downwards or upwards. A downward movement along the demand curve signifies an increase in the quantity demanded when the price is reduced, while upward movement signifies a decrease in the quantity demanded when the price is raised. This is illustrated below. From the diagram, when the price increase to p\(_2\), there is - contraction in quantity demanded to Q\(_1\). When the price falls to P\(_1\), the quantity demanded increase to Q\(_2\). Price is the only factor that brings that change in the quantity demanded while other factors are held constant.

(b) Change in demand is a complete shift of the demand curve forward or backward. An increase in demand induces a shift of the demand curve to the right, while a decrease in demand will cause a shift of the entire demand curve to the left. Therefore, a change in any of the other factors ,except price, that influence demand will cause a shift of the demand curve to a new position. These shifts in demand is illustrated below. In figure, the demand curve has shifted to the right, this‘shows an increase in demand. In figure 2 the demand curve has shifted to the left, this shows a decrease in demand.