Macroeconomics
Achangeintheprice oftheproductitself affectsitsquantitydemanded causing amovementalong the samedemandcurve.However,otherfactors,referredtoas demanddeterminants ,canalsoaffect the demand for a product. These determinants includeconsumers’incomes,tastes,andotherfactors thatwillbediscussedsoon. Anychangeinthesedeterminants causes ashiftofthedemandcurve to a new position, and hence a change in demand (as a whole), rather than a change in quantity demanded. Movement along the curve: When there is a change in the price of a product while all otherfactors influencingdemandremainconstant (ceterisparibus) ,itleadstoamovementalongthedemandcurve. This means consumers are willing to buy more or less of the product at different price points. ● An increase in thepriceofaproductreducesits quantitydemanded .Thisisreflected by an upward movement along the demandcurveknownasa contractionofdemand . On the graph below, this is illustrated by the arrow moving from point X to Y. ● A decrease in thepriceofaproductincreasesitsquantitydemanded.Thisisreflected byadownwardmovementalongthedemandcurveknownasan extensionofdemand . This is illustrated by the arrow moving from point X to Z.
In this case, there is a change in quantity demanded which is the specifc amount of a product or service that consumers are willing to purchase at a particular price. Shifts of thedemandcurve: Factorsotherthanprice(i.e.,non-pricefactors)influencethepurchasing decisionsofconsumers.Suchfactors shiftthedemandcurve causing achangeindemand (≠quantity
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