Indicate whether a change in the value of each of the follow

Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve.

i. Change in market price: (Click to select)no changemovement along demand curveshift in demand curve

ii. Change in income: (Click to select)movement along demand curveshift in demand curveno change

iii. Change in consumer expectations: (Click to select)movement along demand curveshift in demand curveno change

iv. Change in the price of a related good: (Click to select)no changeshift in demand curvemovement along demand curve

v. Change in technology: (Click to select)movement along demand curveshift in demand curveno change

vi. Change in factor prices: (Click to select)no changemovement along demand curveshift in demand curve

Solution

Movement along Demand curve:-

It is associated with a change in demand curve by a rise/fall in the price of commodity alone. It is expressed in form of expansion of demand (Quanity demanded of commodity increases with fall in its price) or contraction of demand (Quanity demanded of commodity decreases with rise in its price).

Shift in Demand curve:-

It is associated with the change in demand for a commodity caused by factors other than the price of a commodity such as price of related goods, income of the consumers, change in technology, fall/rise in consumer expectations etc. When due to change in these other factors, demand fall, it is called Decrease in demand and when the demand rises, it is called increase in demand.

From, the above explanation, it is now very clear that whether a change in the value of each of the following determinants of demand given in the question leads to a movement along the demand curve or a shift in the demand curve. It is summarized below:-