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Movement Along A Curve Vs Shift of A Curve

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What is Movement Along The Demand Curve

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The very foundation of economics involves the demand and supply of a product and how these two get affected because of price and non-price related triggers. Now, this change in the demand and supply is visualised in the form of a curve. When the curve is affected due to the change in price, we see a movement along the curve. However, when the curve is affected due to any change other than any change in the price of a given product, we see the shift of the curve itself. This movement along a curve or shift of the curve results in the increase or decrease of the demand and supply.


The Movement in Demand Curve

The movement along the Demand Curve visually shows how the demand for a product is affected by the change in its price. In this visualisation, all the other determinants of demand are considered constant.


Explanation of The Movement Along The Demand Curve

The relationship between the price of a product and its demand is depicted in the form of a curve. This curve is called the Demand Curve.

Let us explain this with an example. Suppose an egg seller sells eggs at Rs.5/egg. In this scenario, each of the consumers buys an average of 15 eggs per month. So the quantity demanded is 15 eggs/consumer. Now if we visualise this scenario and draw a Demand Curve, it will look like this - 

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The Y-axis shows the different price points and the X-axis shows the Quantity of the product Demanded in response to a particular price. (Other determinants of the demand is assumed to remain constant).

Now if the price of the egg is increased to Rs.8 per piece, we see the demand drops to 10 eggs/consumer per month. If we visualise this data, it will look like this -

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Since 8 is greater than 5 the meeting point of price and the Demand Curve moves upward. At the same time, we see that the Quantity Demanded decreases. So when there is an upward movement along the Demand Curve, we see a decrease in demand because of the increase in price.

The opposite happens when the price of the eggs is reduced to Rs3/egg. In this case, we see that the meeting point of price and demand shifts downward - because 3 is lower than 5. We also see an increase in Quantity Demanded.

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The Shift In The Demand Curve

Sometimes the Demand Curve itself shifts. This shift along the Demand Curve happens when the price of the product remains fixed but the other determinants of the demand change.

Let’s take the example of the same egg seller. Imagine that the egg seller keeps on selling the egg at Rs.5, but the income of the people increases. In that case, we will see a rise in the demand for eggs. This rise in the income of people - a thing not related to the product price - will push the Demand Curve to the right to accommodate more quantities of eggs or better quality of eggs. The opposite will happen if the income of the people decreases - the Demand Curve will shift leftwards.

Note: Usually the shift results in the change in the demand of the people - not the quantity demanded.

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Movement Along The Supply Curve

Now that you know all about movement and Shift in Demand Curve, let’s talk about the movement along the Supply Curve.

When the supply of a product either increases or decreases due to an increase or decrease in its price (all the other factors remain constant), that change in the quantity of the product supplied is depicted as the movement in Supply Curve.

Taking the same example used above, if the price of the egg increases to Rs.8, we will see an increase in the quantity of the product supplied. Because we see an increase in supply, we call it Extension of the supply. This Movement in Supply Curve is an upward movement.

Now, if the price is reduced to Rs.3, we will also see a decrease in the quantity of the product supplied. Because we see a decrease in supply, we call it the Contraction of the supply. This Movement along the Supply Curve is a downward movement.


The Shift of The Supply Curve

When the supply of a product increases or decreases because of any factor other than its own price, we will see a shift of the Supply Curve itself.

So for example, if due to technological advancements, a manufacturer produces more of the product at the same cost, it will be able to supply that product in greater quantities while keeping the price the same In this case we will see a rightward shift of the Supply Curve. 

Again, if, say, the raw materials needed to make the product decreases in quantity, we will see a decrease in the supply of the product too. In this case, the movement and shift in Supply Curve happen leftwards.


Did You Know?

It was Alfred Marshall who first developed the idea of a supply and Demand Curve back in 1890.

FAQ (Frequently Asked Questions)

1. What are the differences between movement and shift in the Demand Curve?


Movement Along The Demand Curve

Shift In The Demand Curve

When the price of a product increases or decreases and other determinants remain the same, we see a decrease or increase in the Quantity Demanded respectively. This increase or decrease is depicted as a movement along the Demand Curve.

When the price of a product remains the same, but the other determinants change, we will see a change in the Quantity Demanded. This change is depicted as a shift in the Demand Curve.

Depends on the price of the product.

Depends on the other determinants of demand other than the product price.

We see a change along the curve.

We see a change in the position of the curve.

We see an increase or decrease in the Quantity Demanded.

We see a change in the Demand itself.

2. What Are The Determinants of Demand other than the price of a product?

The other determinants include -

  • Price of the complementary product.

  • Price of the competitive product.

  • The income of the consumers.

  • The inclination of the consumers towards the product.

  • The expectation of the consumers.

3. What are the differences between the movement and shift in the Supply Curve?


Movement Along The Supply Curve

Shift In The Supply Curve

The visualisation depicts the change in the supply of a product due to a change in its price.

This visualisation depicts the change in the supply due to change in the other factors affecting the supply or supply chain.

Depends on the price.

Depends on factors other than the price.

Change in supply and price are directly proportional.

Not true in this case.

The change in supply is depicted as a movement along the Supply Curve. 

The change in supply is depicted as a shift of the Supply Curve itself.