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2.2

Movement Along vs Shift of the Demand Curve

The most important (and most confusing) idea of the chapter

⏱ 7 min read 🖼 3 diagrams ✎ 6 quick-check questions Lesson 6 of 14
✎ Quick check

This is the most important (and most confusing) idea of the chapter. Use this simple test:

Figure 2.4 – Decision chart: movement or shift?
Figure 2.4 – Decision chart: movement or shift?
How to read this graph

Start at the top: ask what changed.

If only the product's own price changed → we move along the same curve (extension / contraction = change in quantity demanded).

If any other factor changed (income, taste, weather, ads…) → the whole curve shifts (rise / fall = change in demand).

Movement along the curveShift of the curve
Caused byChange in the product's OWN price onlyChange in any other factor (income, taste, weather…)
NameChange in quantity demandedChange in demand
Words usedExtension (price ↓, buy more)
Contraction (price ↑, buy less)		Rise / Increase (curve moves right)
Fall / Decrease (curve moves left)
GraphSame curve, point slides from a to bWhole new curve D1 → D2

Movement along the demand curve

Figure 2.5 – Movement along the demand curve (room coolers)
Figure 2.5 – Movement along the demand curve (room coolers)
How to read this graph

There is only one curve D. Nothing else changed — only the price of room coolers.

At high price P1 people buy Q1 (point a). When price falls to P2 they buy more, Q2 (point b).

Going a → b = extension of demand. Going b → a = contraction.

Shift of the demand curve

Figure 2.6 – Shift of the demand curve
Figure 2.6 – Shift of the demand curve
How to read this graph

Look at the dotted line: the price stays the same, but quantity changes. That's how you know the curve shifted.

Summer arrives → people want more coolers at every price → curve moves right from D1 to D2 = rise in demand (Q1 → Q2).

Winter arrives → less wanted at every price → curve moves left to D3 = fall in demand.

Factors that SHIFT the demand curve

FactorRise in demand (shift right) when…Example
IncomeIncome goes up (for normal goods)Salary rises → people buy more meat
Taste / fashionProduct becomes popularNew trend makes a sneaker brand popular
Weather / seasonWeather suits the productWinter → more tea/coffee; summer → soft drinks
PopulationPopulation growsMore people in town → more demand for houses
Price of substituteSubstitute becomes more expensiveLG prices rise → people buy more Samsung
Price of complementComplement becomes cheaperPetrol cheaper → more demand for cars
AdvertisingSuccessful advert campaignBig TV ad → more sales
ExpectationsPeople expect price to rise in futureExpect petrol price hike → fill tank today
Memory trick: substitutes vs complements

Substitute price ↑ → our demand ↑ (same direction). Substitute price ↓ → our demand ↓ (MCQ 3).

Complement price ↑ → our demand ↓ (opposite direction). Tea price falls → more tea → more demand for cups, less demand for coffee (MCQ 30).

Try it yourself

Use the Shift Simulator: pick an event, predict which curve moves, then watch it happen.

✅ Key points to remember

  • Own price changes → movement along the curve → change in QUANTITY demanded (extension / contraction).
  • Any other factor changes → whole curve shifts → change in DEMAND (rise = right, fall = left).
  • Shift factors: income, taste, weather, population, prices of substitutes & complements, advertising, expectations.
  • Substitute price and our demand move in the SAME direction.
  • Complement price and our demand move in OPPOSITE directions.

✎ Quick check

Answer to see results
Question 1
A rise in demand for petrol is likely after a rise in:
Why? Bus travel (a substitute for driving) costs more → people drive more → more petrol. The other options would reduce car use.
Question 2
If the price of tea falls, we should expect:
Why? Tea (substitute) is cheaper → people drink tea instead. (Demand for cups would RISE, not fall.)
Question 3 · True or False
A fall in the product's own price causes the demand curve to shift right.
Why? Own price causes a movement along the curve (extension), not a shift.
Question 4
Which is NOT a complement to cars?
Why? Petrol, CNG and navigation systems are used with cars; an iPhone is not.
Question 5
The rise in demand for face masks during COVID is an example of:
Why? A non-price factor (disease) increased demand at every price → rightward shift.
Question 6
A change in demand and supply due to factors other than the product's own price is called:
Why? Change / rise-fall / shift are all names for the same idea.
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