Demand Curve Essay Questions

1.       Distinguish between a shift in the demand curve for a product and a movement along the product’s demand curve.

Demand is the quantity of a good or service that consumers are willing and able to purchase at a given time at a given time period. A demand curve is a graph showing how the demand for a good or service varies with changes in its price. Demand curves are convex to the origin but are drawn straight for ease of analysis Movement along the demand curve happens when there is a change in price that causes the quantity demanded to change. An increase of the price will lower demand while lowering the price will increase demand.

A shift of the demand curve happens when there is a change in any non-price determinant of demand. Some non-price determinants are income, the price of other products and tastes or preferences. A shift to the left indicates a decrease in demand whereas a shift to the right indicates an increase.
An example of a shift in the demand curve is shown below.

2. With reference to two different determinants of demand, explain why the demand curve for bicycles might increase.

The most basic way to increase the demand curve of bicycles would be to lower their price, however, there are also many non-price determinants of demand.  Substitutes are one non-price determinant. If the price for a substitute of a bicycle were to rise, the demand for bicycles would go up. For example, if the price of push scooters were to rise, the demand for bicycles would go up.
Another determinant would be change in the age structure of the population. If the percentage of younger people in an economy rises, the demand for bicycles will most likely rise due to the fact that bicycles appeal to the younger population. If the percentage of younger people were to decrease, so would the demand for bicycles.