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Lesson 4: Demand

# Change in demand versus change in quantity demanded

In economics, "demand" refers to the entire curve that illustrates the relationship between price and quantity. "Quantity demanded" refers to a specific point on that curve, where a certain price is associated with a certain quantity. So, while demand encompasses the whole curve, quantity demanded is just one snapshot within it.

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• Can anyone please explain me how come slash in dealership prices won't result in change in demand curve? I have replayed the video many times and read the below explanations but failing to understand. Please assist!
• To elaborate on Andrew's comment, I believe you can say that there has to be a change in something other than price for the specific good or service you're talking about to shift the demand curve for that good or service. However, a change in price of another good or service that is either a complement or a substitute for the good or service in question can shift the demand curve for the good in question.

For example, in the video a change in price of gasoline (a complement for the good in question which is the car) does shift the demand curve for the car. Since you need gas to run a car then the price of gas is something that affects the overall cost of having a car and an increase in the price of gas means consumers can afford less of a car at all price points and vice versa for a decrease in the price of gas.

In the case of a substitute for a car, such as public transportation, a change in price for public transportation will make a car either more or less expensive relatively and would shift the demand curve for a car either right (if a car was now relatively less expensive to public transportation) or left (if a car was now relatively more expensive to public transportation).
• the 10% price cut happens to the entirety of the curve regardless where the price is sitting at, so wouldn't it shift demand and not quantity demanded?
• Sal explains it at ; I'll try to flesh it out a bit using an example:

Currently we sell 5 cars in category A at a price of \$10,000.00, 7 cars in category B at \$9,000.00, and 10 cars in category C at \$8,100.00.

Lowering the prices by 10% will:
- decrease the price of cars in category A to \$9,000.00 and increase their number of sales to 7;
- decrease the price of cars in B to \$8,100.00 and increase their number of sales to 10;
- decrease the price of cars in C to \$7,290.00 and increase their number of sales to (maybe) 14.

A shift in demand would mean, that the amount of cars being sold at \$9,000.00 or \$8,100.00 had changed, but that didn't happen: We could "only" observe an increase of sales, i. e., quantity demanded for the individual cars.
• When the price goes down in public transportation, quantity demanded increases it leads to change in demand, so it should be shifted to the right, but in this video you shifted to the left and I didnt understand why you did so?
• I think you are confusing two markets: the market for public transportation (like trains) and the market for cars. A decrease in the price of train rides would lead to an increase in the quantity demanded of train rides, not cars. The entire demand for cars decreases because public transportation is a substitute for a car. So when an alternative, like riding the train, gets cheaper, then no matter what the current price of a car is, demand will be lower.
• Does that mean that a change in internal factors changes the quantity demanded whilst a change in external factors implies a demand curve shift?
• I'm not sure what you mean by "internal factors". A move along a demand curve represents a change in quantity demanded that is caused by a change in price. Any other change that affects demand that is NOT the price of the good shifts demand.
• what is The Determinants of Demand
• Determinants of demand are the factors involved in causing consumers(the people buying products) to purchase goods and services.
• Can someone explain to me the veichle registration fees example? If the price of the veichle is going down, how isnt that a movement along the curve? I dont really see how that would be different from the first example (which im also not sure I entirley understand)

• So, vehicle registration fees are used by state DMVs in their respective registration process. This implies that, for the market of Brand x of cars, the dealership price does not change, so it would not be a movement along the curve. The only thing that this did change was cause the total cost of ownership for the car to go down, because now people who own/buy the car do not have to pay as much in registration fees as they did before. Now people can increase their demand for the car, which is why the state lowering vehicle registration fees causes a change in demand.
• In the case where the price of gasoline increases leading to a decrease in demand (around ), would the effect depend on the vehicles gas usage? For example, if the price of gasoline goes up and this particular vehicle is very gas efficient, wouldn't the demand for that vehicle increase as well?

This could also apply the example with a recession and falling household incomes- if the vehicle is particularly economic, would this lead to an increase in demand?
• The state lowers the vehicle registration fees.
Why does the demand curve shift?
Because it affects the price and when price decreases quantity demanded increases.
Maybe I am wrong. Can anyone explain?
• You're right. The demand curve for a certain car does shift to the right when the state lowers registration fees, because the overall cost of purchasing the car has gone down. Demand depends on if people want to purchase a good and if people can purchase a good. If the registration fee goes down, more people can purchase the good so the quantity demanded increases.
(1 vote)
• I still don't understand. When does the whole demand curve shift?