Explain the differences between a movement along a demand curve and a shift in demand curve using diagrams

1. Movements A movement refers to a change along a curve. On the demand curve, a movement denotes a change in both price and quantity demanded from one point to another on the curve. The movement implies that the demand relationship remains consistent. Therefore, a movement along the demand curve will occur when the price of the good changes and the quantity demanded changes in accordance to the original demand relationship. In other words, a movement occurs when a change in the quantity demanded is caused only by a change in price, and vice versa.

2. Shifts A shift in a demand curve occurs when a good's quantity demanded changes even though price remains the same. For instance, if the price for a bottle of beer was $2 and the quantity of beer demanded increased from Q1 to Q2, then there would be a shift in the demand for beer. Shifts in the demand curve imply that the original demand relationship has changed, meaning that quantity demand is affected by a factor other than price. A shift in the demand relationship would occur if, for instance, beer suddenly became the only type of alcohol available for consumption.

Assume the price of wheat increases. How it will affect the:

i) Demand for rice
Price (RM)

10

10

Quantity of rice (kg)

Based on the figure above, if the price of wheat increases, the demand curve for rice will shift from left to right. At the price RM 10, the quantity demanded increases from 5 kg to 10 kg where at point A the quantity demanded is 5 kg while when there is an increment in the price of wheat, the demand increases to point B at quantity demanded at 10 kg.

Price (RM)

10

20

Quantity of roti canai (units)

Figure above shows if the price of wheat increases, the supply curve for roti canai will shift from right to left. At the price RM 3 on point A, the quantity supplied is 20 units and at the same price on point B, the quantity supplied is 10 units.