IBonomicsMovement Along the Demand CurveSL
MicroeconomicsA diagram showing movements along a demand curve caused by changes in the price of the good itself.
Curves and elements
- Demand curve
- Shows the inverse relationship between price and quantity demanded.
- A
- The original position on the demand curve, at price PA and quantity QA.
- Extension in demand (A to B)
- A movement down the demand curve caused by a fall in price from PA to PB.
- Contraction in demand (A to C)
- A movement up the demand curve caused by a rise in price from PA to PC.
- Price change
- A change in the good’s own price causes movement along the demand curve rather than a shift of the curve.
Key explanations
- 1
A movement along the demand curve occurs when the good’s own price changes.
- 2
A fall in price from PA to PB causes an extension in demand, moving from point A to point B.
- 3
A rise in price from PA to PC causes a contraction in demand, moving from point A to point C.
- 4
Only price changes cause movement along the demand curve; non-price factors shift the whole demand curve.
Example exam question
Explain the difference between an extension and a contraction in demand, using a demand curve diagram.
Show example answer
An extension in demand occurs when price falls and quantity demanded increases, while a contraction in demand occurs when price rises and quantity demanded decreases, all things being equal.
