Movement along demand curve and shift in demand curve with factors causing shift in demand curve.

 Movement along demand curve

Movement along the demand curve is based on the principle of law of demand. According to this principle, demand increases when price decreases and vice versa versa vice versa versa ,other factors determining the same. Therefore, movement along the demand curve may be defined as a nature of Extension and contraction in demand due to change in price other characters remaining the same. In other words , the moment of the consumer up and down on the same demand curve due to change in price, other factors remaining the same is also defined as movement along the demand curve. It can be explained with the help of following figure:

In the above figure initially, consumer is in equilibrium at point 'a' on the demand curve DD when price is OP and quantity is OQ. When price of the commodity increases from OP to OP1, the quantity demanded for the commodity by a consumer decreases from OQ to OQo and the consumer moves from point a to b, it is known as construction in demand. Similarly, when price decreases from OP to OPo, the quantity demanded for the commodity by the consumer from OQ to OQ1 and the consumer moves down from point a to c, it is known as extension in demand. In the figure, the extension and contraction in demand due to change in price other factors remaining the same is jointly known as movement along the demand curve. 

Shift in demand curve. 

The condition of demand also changes due to change in other factors not related to price. In such a situation, the initial demand curve along with equilibrium point of consumer either shifts upward or downword which is defined as Shift in demand curve. The demand curve will shift due to two reasons. 

1. Increase in demand: When quantity demanded for a commodity increases due to favourable change in other factors not related to price, the initial demand curve along with equilibrium point of consumer will shift upward to the right. It is known as increase in demand. 

2. Decrease in demand: When quantity demanded for a commodity decreases due to unfavourable change in other factors not related to price, the initial demand curve along with equilibrium point of consumer will shift downward downward to the left, it is known as decrease in demand. 

It can be explained with the help of following figure:

In the above figure, consumer is in equilibrium at point 'a' on a demand curve DD when the price of a commodity is OP and the quantity demanded is OQ. When quantity demanded increases from OQ to OQ1 due to favourable change in other factors even at a constant price OP, the initial demand curve along with equilibrium point of consumer shifts upward to the right from DD to D1D1. It is known as increase in demand. Similarly, when quantity demanded decreases from OQ to OQo due to unfavourable change in other factors even at constant price OP, the initial demand curve along with equilibrium point of consumer shifts downward to the left from DD to DDo. It is known as decrease in demand. In the figure, the decrease and increase in demand due to change in other factors is jointly known as Shift in demand curve. 

     Following are the factors causing Shift in demand curve:

1. Change in income of consumers

2. Change in price of related commodities

3. Change in custom and tradition

4. Change in weather and climatic condition

5. Change in taste and preference of consumer

6. Change in fashion and advertisement

7. Change in size of population

8. Change in expectation of consumers

1. Change in income of consumers: If the income of consumer increases, the quantity demanded for the normal goods increases and the demand curve will shift upward to the right, whatever be the price and vice versa. Similarly, if the income of consumer increases, the quantity demanded for inferior goods decreases and demand curve will shift downward to the left, whatever the price and vice versa. 

2. Change in price of related commodities: If the price of substitute goods of a commodity increases, the quantity demanded for the commodity increases and the demand curve will shift upward to the right whatever be the price and vice the price and vice versa. If the price of complementary goods of a commodity decreases, the quantity demanded for the commodity increase and demand curve will shift upward to the right and vice versa. 

3. Change in custom and tradition: Custom and tradition affects the quantity demanded. The commodity related to the customs and tradition has high demand and demand curve will shift upward to the right whatever be the price and vice versa. For example: demand for sweets and clothes increases in Christmas. 

4. Change in weather and climatic conditions: The demand of goods related to the weather and climatic condition increases and the demand curve will shift upward to the right, whatever be the price and vice versa. For example: demand for jackets increases in winter. 

5. Change in taste and preference of consumers: If a commodity is out of fashion then consumers start to dislike, whatever be the price, the demand for the commodity decreases whatever be the price, the demand curve will shift downword to th left and vice versa. 

6. Change in fashion and advertisement: If a commodity is well advertised and it is in fashion, the quantity demanded for the commodity increases whatever be the price, the demand curve will shift upward to the right and vice versa.