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The difference in a change in quantity demanded of X and a change in demand of X are based on a difference in what causes the.
The reason for a change in quantity demanded of X is a change in own price of X. Assume the demand curve is DD and we are at A. When the price of X rises from P1 to P2, we move from A to B. the new point shows price of P2 that consumers are willing to pay for Q2. This change from Q1 to Q2 is the result of change in price of X and is referred to as a decrease in quantity demanded of X. It is shown as a movement ALONG the demand curve.
The reason for a change in demand of X is a change in other determinants of demand for X. These determinants include- income level, and price of a related good (substitute or complementary good). A change in these determinants can cause the demand curve to shift out (if demand increases) or inwards ( if demand decreases) . both cases are shown below.
In this question, we have 4 steps
• Identify the effect of change- is it demand or supply that is affected
• Direction of change- increase or decrease
• Graphical presentation of change
• Effect on price and qty.
The event is a fall in the price of solar panels. This affects demand. It is shown with an initial
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