Skip to main content
← All articles

26 October 2026

Movement along the demand curve, or a shift of it?

One question decides which: did the good's own price change, or did something else?

Students mix these up in definitions, in diagrams and in the words they use. One question sorts it out.

Did the good’s own price change?

  • Yes → a movement along the same curve. The board’s words are change in quantity demanded: expansion when price falls, contraction when it rises.
  • No, something else changed → the whole curve shifts. This is a change in demand: an increase (rightward) or a decrease (leftward).

What shifts the curve

  • Income — for a normal good, higher income shifts demand right; for an inferior good, left.
  • Price of a related good — a dearer substitute shifts demand right; a dearer complement shifts it left.
  • Tastes, preferences and expectations.

In the diagram

Label both axes (price; quantity demanded), name each curve (D₁, D₂), mark the old and new points, and draw the arrow the right way. A shift drawn as a movement along one curve loses the diagram marks even when the explanation is right.

The same logic, with the same words, applies to supply.