Page 111 - DECO401_MICROECONOMIC_THEORY_ENGLISH

Microeconomic Theory

Notes means that how many children, teenagers, men, women etc. in population. If there comes a change
in composition of population as number of women increased, demand of those goods will increase
which are bought by women.
7. Distribution of Income: Distribution of income to be in future in society also affects the market
demand. If distribution is unequal, the usable luxury goods such as T.V., automatic washing machine,
video camera etc. will be more demanded by rich people. On the other hand, distribution of income
is equal, then demands of luxury goods will decrease and compulsory and comfortable goods will
be more demanded.

Normal goods are those whose demand increase with the increase in the income
of consumer.

6.5 Change in Quantity Demanded and Change in Demand
Or
Movement Along Demand Curve and Shift of the Demand Curve

According to Economists, “Change in quantity demanded and change in demand related concepts
are different." Change in quality demanded refers to effect on demand to change in the rate of goods
whereas other determinants of demand such as income, taste and price of other goods remains
constant or stable. Because quality demanded on a given price is shown by a point on the demand curve,
so change in the quality demanded has showed with the different points on same curve or movement
along a demand curve. Inversely, change in demand is not done due to changes in prices of goods; it
indicates the effect in demand of consumer for goods due to change in income, taste, price of other
goods, whereas price of goods remains stable. Change in demand shows to shift or slip of complete
curve from left to right side. Both different types of change in demand are important. Movement along
demand curve on some demand curves or change in quality demanded represents the coordination in
quantity demanded by consumer due to the change in market price. Inversely, shift of demand curve
represents the coordination of consumer and upcoming changes in balanced prices and quantity related
to changes in outside matters (as income, taste, price of other goods etc.).

1. Change in Quantity Demanded or Movement Along the Demand Curve

When quantity demanded is changed only due to the change in price, then change in demand is
represented by the different points on same demand curve. Rise in demand is called extension of
demand to fall in price, and falling in demand is called contraction of demand to rise in price. In brief,
movement along a demand curve response to price changes for those goods. In these movements it
is accepted that demand has other unchangeable determinants besides the price. A given demand
represents the changes in quantity demanded on the graph due to change in price of the moving object.
In brief,
Change only in price

Changes in quantity demanded

Movement along the demand curve

104 LOVELY PROFESSIONAL UNIVERSITY