Demand vs. Quantity Demanded

Key Distinctions

• Demand Curve: Represents the relationship between price and quantity demanded for a product.
• Quantity Demanded: Refers to a specific point on the demand curve at a given price.
• Change in Quantity Demanded: Movement along the demand curve due to a change in price.
• Change in Demand: Shift of the whole demand curve due to factors other than price.

Scenarios Affecting Demand and Quantity Demanded

Scenario 1: Car Dealerships Slash Prices by 10%

• Effect: Change in Quantity Demanded
• Explanation: Price decrease leads to movement along the demand curve, not a shift of the curve itself.

Scenario 2: Price of Gasoline Increases

• Effect: Change in Demand
• Explanation: Increased gasoline prices reduce consumers' disposable income, shifting the demand curve to the left (decrease in demand).

Scenario 3: Prices of Public Transportation Decrease

• Effect: Change in Demand
• Explanation: Public transportation becomes a more attractive substitute, leading to a leftward shift in the demand curve.

Scenario 4: State Lowers Vehicle Registration Fees

• Effect: Change in Demand
• Explanation: Lower ownership costs increase demand, shifting the demand curve to the right.

Scenario 5: Recession Leads to Falling Household Incomes

• Effect: Change in Demand
• Explanation: Decreased incomes lessen purchasing power, shifting the demand curve to the left.

Scenario 6: Consumers Expect Car Prices to Rise Next Year

• Effect: Change in Demand
• Explanation: Anticipated price increases prompt more current purchases, shifting the demand curve to the right.

Summary

• Change in Quantity Demanded: Occurs due to change in the product's price, resulting in movement along the demand curve.
• Change in Demand: Result of factors affecting consumer purchasing habits regardless of current price, leading to a shift in the demand curve.
• Equilibrium Consideration: Changes in demand or quantity demanded can influence the equilibrium price and quantity in the market.