Movements of a Demand Curve [Virtual Learning Arcade]

An explanation of the factors that cause shifts in demand curves and moves along them as part of the price elasticity of demand simulation of the Virtual Learning Arcade.

Spotlight on the theory

Demand Curve, Movements

The Law of Demand states that the demand curve is downward sloping.

There are TWO types of change in demand;

1. Movement ALONG the demand curve
2. SHIFTS in the demand curve

A movement ALONG the demand curve

A movement along the demand curve is caused by a change in PRICE of the good or service. For instance, a fall in the price of the good results in an EXTENSION of demand (quantity demanded will increase), whilst an increase in price causes a CONTRACTION of demand (quantity demanded will decrease).

A SHIFT in the demand curve

A shift in the demand curve is caused by a change in any non-price determinant of demand. The curve can shift to the right or left.

A rightward shift represents an increase in the quantity demanded (at all prices), D1 to D2, whilst a leftward shift represents a decrease in the quantity demanded (at all prices). D1 to D3.

movement in demand

The movements can be caused by the following;

  • change in consumer income - If consumer income increases, then consumers buy more normal/luxury items and the demand curve shifts to the right (D1 to D2).
  • Change in the price of other goods - if the price of a complementary good increases then the demand for the good will fall. This will result in a leftward shift in the demand curve of any complementary good (D1 to D2). However, if the price of a substitute good increases, then the demand for the other good would increase as consumers switch their consumption patterns (D1 to D2)
  • Changes in tastes and fashions - if a good becomes fashionable then the demand for the good will shift to the right (D1 to D3).

How will the demand curve for a normal good shift if the price of a complementary good falls? (Select one answer)
(a) * Shift left
(b) * Shift right
(c) * No Shift


How will the demand curve for a normal good shift if the price of the good becomes more expensive? (Select one answer)
(a) * Shift left
(b) * Shift right
(c) * No Shift