Economics Basics F shifts vs movement
Introduction
What Is Economics
Scarcity
Macro and Microeconomics
Production Possibility Frontier (PPF)
Opportunity Cost
Specialization and Comparative Advantage
Absolute Advantage
Demand and Supply
The Law of Demand
The Law of Supply
Time and Supply
Supply and Demand Relationship
Equilibrium
Disequilibrium
F. Shifts vs. Movement

Elasticity
The availability of substitutes
Income available to spend on the good
Time
Income Elasticity of Demand
Utility
Monopolies
Oligopolies
Perfect Competition
Conclusion

 

 

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For economics, the “movements” and “shifts” in relation to the supply and demand curves represent very different market phenomena: 

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1.  Movements   

 

Like a movement along the demand curve, a movement along the supply curve means that the supply relationship remains consistent. Therefore, a movement along the supply curve will occur when the price of the good changes and the quantity supplied changes in accordance to the original supply relationship. In other words, a movement occurs when a change in

quantity supply is caused only by a change in price, and vice versa.

 

 

2.  Shifts – A shift in a demand or supply curve occurs when a good’s quantity demanded or supplied changes even though price remains the same. For instance, if the price for a bottle of beer were $2 and the quantity of beer demanded increased from Q1 to Q2, then there would be a shift in the demand for beer. Shifts in the demand curve imply that the original

demand relationship has changed, meaning that quantity demand is affected by a factor other than price. A shift in the demand relationship would occur if, for instance, beer were all of a sudden the only type of alcohol available for consumption.

 

 

Conversely, if the price for a bottle of beer were $2 and the quantity supplied decreased from Q2 to Q1, then there would be a shift in the

supply of beer. Like a shift in the demand curve, a shift in the supply curve implies that the original supply relationship has changed, meaning that quantity supplied is affected by a factor other than price. A shift in the  supply curve would occur, if, for instance, a natural disaster caused a mass shortage of hops: beer manufacturers would therefore be forced to supply less beer for the same price.

 

 

 

 

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