Movement along a Curve Versus Shift of a Curve Video Lecture | Economics CUET Preparation - Commerce

the topic of today's discussion is to
understand the concepts of movement was
a shift in demand and supply curve so
prior to this lecture we learned that
the factors that affect demand this is
the price of the good consumer income
prices or related Goods test
expectations and number of buyers now in
the previous lecture we know like how to
plot the relationship between price of
the good which means this one and the
quantity demanded and this is what we
learned in the last lecture
so let's first draw the excess for
demand so on the vertical axis we
measured price on the horizontal axis we
measure quantity and our typical demand
curve looks like this so this is our
demand so let's take two prices say
dollar five at five dollars quantity
demanded is say ten and if price
decreases to dollar three so there's a
decrease in price so we know by law of
demand quantity demanded should increase
something more than ten so let's call it
50 so this is our typical demand curve
and this shows the relationship between
price and quantity demanded
now when price decreased from 5 to $3
quantity demanded increase from 10 to
$15 so our initial point this point a on
demand curve as now the new point is
point B so this movement is from point 2
a to be this and this is called movement
along along the demand curve now you can
see here that as price declined from
five to three dollars there's a movement
along the demand curve from point A to
point B because quantity demanded
increased from 10 to 15 so movement
along the demand curve is caused by the
change in price of the product so this
is caused by change in price of the
product now how do we show if there's
change in income of the product and that
we show using the concept shape if
there's a change in income suppose let's
do it again
so let's do the excess first we have
price on the vertical axis and quantity
on the horizontal axis and our demand
curve is a downward sloping and remember
we have drawn this demand curve
assuming certain amount of income say
less the price is five dollars and at
five dollars again quantity demanded is
say ten now for some reason there's a
increase in income now typically there's
an increase in income of the consumers
consumers are going to consume more at
the same price given the price is five
dollars now how do we show this scenario
of increasing income this scenario can
be shown by shifting the demand curve to
the right so we will ship this demand
curve to the right and let's call it d1
so for the same price now the consumers
consuming more say 20 units and this
increase from 10 to 20 is caused by not
by change in price but increase in
income so this is called shift of demand
curve and right shift implies increase
in demand so right shift implies
increase in demand and again what caused
it it caused by changes in income
similarly if there is a change in taste
and preferences suppose suppose suddenly
the consumer doesn't want to consume
certain thing because of change in
fashion or change in taste or something
we can show this scenario by shifting
our demand curve to the left something
like this so the same price now consumer
might be consuming less say six units
and this left shift
it's called decrease in demand now what
are the factor that caused this this
this is also called the shift is also
called change in demand so this change
in demand is the same thing as shift and
is caused by change in fact other than
price of the product so anything other
than the price of the products changing
is generally shown by ships of the
demand curve and right shifts means
increasing demand and lead shipments
decrease in demand now we'll do the same
thing for supply so we know the factors
that affect supply these are price of
the product input prices technology
expectations and number of sailors now
if there is a change in price of a
product we'll have a movement along the
supply curve so let's show it using
again my supply diagram so I have a
price I have a quantity and my supply
curve always at say $10 the sellers are
willing to sell 50 units and if price
increases surprise increases to $15
sailors might be willing to sell more
and this is shown by 70 so this movement
from this point A to point B because of
increasing price it's called movement
along the supply curve and you can see
we are moving along the supply curve but
supply is not only affected by the price
it also if it's played input price our
technology expectations a number of
sellers now how do we show if there's an
increase in the number of sellers and
this can be shown by shift of supply
curve so we'll draw this price quantity
this is the supply curve and say this is
$10 a $10 seller is willing to sell say
50 units what if a $10 price there
suddenly there's an increasing number of
sellers so that means there are more
products to be sold at $10 price this
can be shown by right shift of the
supply curve so we can shift the supply
curve to the right
s1 so extender $10 and this may be say
65 so this right shift is called shift
of supply curve
and it is caused by change in factors
other than price
similarly if they can be a natural
disaster in that case a factory might
have wiped out and so supply will
decrease so the decrease in supply can
be shown by this left shift of the
supply curve to s2 so this is left shift
so left shift means decrease in supply
and you can see here price remains same
at $10 is simply that supply curves are
shifting left and right so in our next
diagram I'm going to show how this
shifts of supply and demand will
interact when demand and supply is
brought together drawn our demand and
supply together the price I have
quantities so this is the demand curve
and this is the supply curve and we all
know equilibrium is at the point where
demand and supply intersects so let's
synchronize at like 8 dollars with say
30 units what will happen if there's an
increase in demand so increasing demand
means this is right shift of the demand
curve suppose demand curve shifts to a
right at this point
D 1 so this is right shift of the demand
curve
so my new equilibrium will be at this
point and at this point obviously prices
has gone up say do $10 and obviously at
higher price more quantities will be
sold and since demand increase because
of increasing factors other than price
so now I have say 40 so this is how you
show the new equilibrium that is caused
by ships of demand curve similarly you
can do it for supply curve so once more
if prices are changing there always be
movement along the demand curve or
supply curve if anything other than the
price of the product is changing there
will be shifts of demand curve of supply
curve right shift always means increase
and left shift always means decrease