A movement along a demand curve happens when the good’s own price changes. A shift of the curve happens when something else changes buyers’ willingness to buy at every price. Exam questions test whether you can name the right one and draw it.
This lesson is the core of demand relationships, and later work on supply and equilibrium uses the same logic.
What is the idea, step by step?
- A demand curve shows quantity demanded at each price, with everything else held constant.
- If the price changes, only the point moves, along the same line. Economists call a fall in price an extension and a rise a contraction of quantity demanded.
- If a non-price factor changes (income, tastes, prices of related goods, population, expectations), buyers want a different quantity at every price. The curve moves: right for an increase in demand, left for a decrease.
- The first thing you write should name what changed, then say which of the two it is.
Worked example
A fictional stall at Kampung Seri Market sells iced lime tea. Demand is Qd = 160 − 20P, where P is the price in RM and Qd is cups per day.
| Price (RM) | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|
| Qd, normal day | 120 | 100 | 80 | 60 | 40 |
| Qd, heatwave | 150 | 130 | 110 | 90 | 70 |
Case A: the stall cuts the price from RM5 to RM4. Quantity demanded rises from 60 to 80 cups. Same column of the table, same curve, so this is a movement down the curve (an extension).
Case B: a heatwave arrives and the price stays at RM5. Quantity demanded rises from 60 to 90 cups because buyers are thirstier. The price did not change, so the cause is outside the price, and the curve has shifted right by 30 cups at every price.
Check the shift: every price in the heatwave row is exactly 30 higher than the normal row (120 to 150, 100 to 130, and so on). That is how a true shift looks in a table.
The mistake to watch for
Mistaken answer: “The price of lime tea fell, so demand increased and the curve shifts right.”
The price is the variable on the vertical axis, so a price change cannot shift the curve. Correct version: “The price fell, so quantity demanded extended from 60 to 80 cups, a movement down the demand curve.” Draw an arrow along the line, not a second line.
Check yourself
1. A fictional bakery in Bukit Melur raises the price of its pandan buns. Name the change on the demand curve for buns.
Show answer
A contraction in quantity demanded: a movement up along the same curve. The cause is the good’s own price.
2. A fictional town’s average income rises and buyers want more lime tea at every price. What happens to the curve?
Show answer
Demand increases: the curve shifts right. The cause is a non-price factor (income), so it is not a movement along the curve.
3. In the table above, at RM3 the heatwave demand is 130. If instead the stall had cut the price from RM4 to RM3 on a normal day, what would quantity demanded be, and is it a movement or a shift?
Show answer
On a normal day RM3 gives 100 cups, up from 80. It is a movement down the curve (extension), because only the price changed.
Where this leads next
Next, explain a demand factor in a fictional market to practise writing the cause behind a shift. Test the idea with the demand, supply and shift explorer, then attempt the mixed practice set.
If movement versus shift still slips in timed writing, our online one-to-one Economics tuition can work from your own answers.