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Economics

Change in Quantity Demanded

A change in quantity demanded is a movement along a/single demand curve.

The main determinant of a change in the quantity of a commodity demanded is the price of the commodity under consideration.  The quantity of a commodity demanded changes with price.

More is purchased at a lower price than at a higher price.

A change in the quantity demanded is of two types.

  1. Increase in the quantity demanded: There is an increase in the quantity demanded if the quantity purchased increases as a result of a decrease in the price of the commodity.
    quantity demanded
  2. Decrease in the quantity demanded: There is a decrease in the quantity demanded if the quantity of the commodity purchase decreases as a result of an increase in price.
    quantity demanded2

Changes in Demand or Shifts in Demand curve

This is a complete shift of demand curve to the right or left.

There is a change in demand of the demand curve shifts to an entirely new position.

This is a completely new demand Schedule and demand curve, showing that at the old price, more or less of the commodity would be purchased.

A shift or change in demand is determined by other factors affecting demand except the price of the commodity e.g. change in taste and fashion, changes in population size, etc.

A change in demand is of two types:

(a)       Increase in Demand: If there is an increase in demand, the demand curve will shift to the right indicating that at the old price more of the commodity will be purchased.

quantity demanded3

Rightward shift (Increase in Demand)

(b)       Decrease in Demand: if there is a decrease in demand, the demand curve will shift to the left, showing that at the old price less of the commodity is being purchased.

quantity demanded4

Change in Quantity supplied.

A change in the quantity supplied of a commodity means a movement along a particular supply curve.

If is determined by the price of the commodity.

A change in quantity supplied is of two types;

  1. Decrease in the quantity supplied: The quantity supplied decreases as a result of a decrease in the price of the commodity.
quantity demanded5

Decrease in the quantity supplied

  1. Increase in Quantity supplied: With an increase in the quantity supplied, the quantity offered for sale increase as a result of an increase in the price of the commodity.
    quantity demanded6

SHIFT OR CHANGE IN SUPPLY

A Change in supply brings about a shift in the supply curve either to the right or to the left.

With change in supply, the supply curve shifts to an entirely new position indicating that at each of the old prices more or less of the commodity will be supplied.  It is determined by the factors affecting supply other than the price of the commodity.

A change in supply is also of two types;

  1. Decrease in supply: With a decrease in supply, the supply curve will shift to the left, showing that at each of the old prices, less of the commodity will be supplied.
    supply change
  2. Leftward shift (decrease) in supply
    1. Increase in Supply: With an increase in supply the supply curve shifts to the right indicating that at each of the former prices, more of the commodity will be supplied.
      supply change2

Questions (Post your answer and question title below for evaluation and discussion)

  1. Discuss the factors that should innovate a producer to supply more of a commodity.
  2. Differentiate with the aid of diagram between change in supply and change in quantity supplied.

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