MOVEMENT ALONG THE DEMAND CURVE VS. SHIFT OF DEMAND CURVE

MOVEMENTS ALONG THE DEMAND CURVE VS. SHIFT OF DEMAND CURVE

It is important for the business decision-makers to understand the distinction between a movement along a demand curve and a shift of the whole demand curve.

A movement along the demand curve indicates changes in the quantity demanded because of price changes, other factors remaining constant. A shift of the demand curve indicates that there is a change in demand at each possible price because one or more other factors, such as incomes, tastes or the price of some other goods, have changed.

Thus, when an economist speaks of an increase or a decrease in demand, he refers to a shift of the whole curve because one or more of the factors which were assumed to remain constant earlier have changed. When the economists speak of change in quantity demanded he means movement along the same curve (i.e., expansion or contraction of demand) which has happened due to fall or rise in price of the commodity.

In short‘change in demand’represents shift of the demand curve to right or left resulting from changes in factors such as income, tastes, prices of other goods etc. and ‘change in quantity demanded’ represents movement upwards or downwards on the same demand curve resulting from a change in the price of the commodity.

When demand increases due to factors other than price, firms can sell more at the existing prices resulting in increased revenue. The objective of advertisement and all other sales promotion activities by any firm is to shift the demand curve to the right and to reduce the elasticity of demand. (The latter will be discussed in the next section). However, the additional demand is not free of cost as firms have to incur expenditure on advertisement and sales promotion devices

Goods and Service Tax Book (Updated upto 20th January 2018)

GST Student friendly Book most relevant/Useful for CA Intermediate/IPCC, CS executive , CWA Intermediate and CA final. 

Also useful for B.Com / M.Com / MBA/ BBA/UPSC/ SSC and Various Govt Exams.!! 

This book is approved by Ministry of HRD Govt.of India as Students friendly book.

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Author Name- CA Harshita Raichandani and CA Dhananjay Ojha

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7.Definitions of Technical term related with GST is given at one place.

8.Most useful for CA Intermediate/IPCC, CS executive , CWA Intermediate and CA final. ALSO useful for B.Com / M.Com / MBA/ BBA/UPSC/ SSC and Various Govt Exams.

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GST (Goods and Services Tax) Book -A student friendly Book. - Bharat Gurukul

GST Student friendly Book most relevant/Useful for CA Intermediate/IPCC, CS executive , CWA Intermediate and CA final. ALSO useful for B.Com / M.Com / MBA/ BBA/UPSC/ SSC and Various Govt Exams.!! This book is approved by Ministry of HRD Govt.of India as Students friendly book. Author Name- CA Harshita Raichandani and CA Dhananjay Ojha Book […]