Demand: a movement or a shift?
| English | 中文 | Pinyin |
|---|---|---|
| complement/ˈkɒmplɪmənt/ | 互补品 | hù bǔ pǐn |
| quantity demanded/ˈkwɒntɪti dɪˈmændɪd/ | 需求量 | xū qiú liàng |
A decision you can investigate
- A learner wants a costly concert ticket but cannot afford it. A different learner can afford it but does not want to attend.
- Neither desire alone nor money alone establishes demand for that ticket.
Build the explanation
- Demand is the quantity buyers are willing and able to purchase at each price over a period. A change in the ticket’s own price causes movement along its demand curve, with other determinants unchanged.
- Advertising, fashion and tastes, income, population size/age patterns and the prices of substitutes or complements can shift the curve. For a normal good, higher income usually raises demand; the income effect differs for an inferior good.
Work through the evidence
- At a ticket price of 80 yuan, the old demand schedule shows 40 tickets. After an effective advertising campaign it shows 55 at the same price. This is increased demand, not a movement caused by a price cut.
- A competing concert is a substitute: its price fall can reduce demand for this concert. Travel to the concert can be a complement 互补品: a higher travel price can reduce ticket demand.
Which is a movement along this ticket demand curve?
The ticket’s own price causes a movement; the other changes can shift demand.
What can a fall in the price of a close substitute do?
Buyers may switch to the cheaper substitute.
A complement becoming more expensive can reduce demand for the other good.
A higher combined cost can reduce purchases of goods used together.
Test the limits
- A rightward shift means more demanded at each unchanged price. Do not use “demand increases” for every own-price movement; specify quantity demanded 需求量 when price changes.
- The direction depends on the relationship: higher income does not raise every product’s demand, and products are substitutes or complements in a particular use.
Which observation identifies an increase in demand?
The unchanged-price comparison isolates a change in a non-price determinant.
Apply and explain your answer
- Why does an advertising campaign increasing purchases at an unchanged ticket price indicate a shift?
- The non-price determinant changed; more tickets are demanded at the same price.
Match the terms to their meanings.
Each term describes a specific mechanism in this lesson.
Use the terms precisely
- quantity demanded: The amount buyers choose at a particular price.
- complement: A good used together with another good.
At a ticket price of 80 yuan, the old demand schedule shows 40 tickets. After an effective advertising campaign it shows 55 at the same price. This is increased demand, not a movement caused by a price cut. A competing concert is a substitute: its price fall can reduce demand for this concert. Travel to the concert can be a complement: a higher travel price can reduce ticket demand.
A rightward shift means more demanded at each unchanged price. Do not use “demand increases” for every own-price movement; specify quantity demanded when price changes. The direction depends on the relationship: higher income does not raise every product’s demand, and products are substitutes or complements in a particular use.
Demand is the quantity buyers are willing and able to purchase at each price over a period. A change in the ticket’s own price causes movement along its demand curve, with other determinants unchanged.