The two concepts of change in demand and change in quantity demanded are different economics concepts. According to Wells (2010), change in demand of a commodity is influenced by variation in consumers’ desire to purchase more or less of a commodity regardless of the price of the commodity. Change in demand of a commodity results in divergent shifts in the demand curve of the particular product. A demand curve is a graphical representation of the interaction between the price of a product and the quantity of the product demanded within a given period (Bertola, Foellmi, & Zweimüller, 2006). The demand curve can shift either to the left or the right due to variations in numerous factors that affect the demand of a given product. Therefore, change in demand refers to the increase or decrease in demand for a product (Bertola, Foellmi, & Zweimüller, 2006). Change in demand is caused by variation in numerous factors and determinants of demand, such as consumer preference and price of substitutes, while the price of the product is maintained at a constant. Changes in demand of a commodity is measured by shifts in the demand curve of the commodity.
As opposed to change in demand, change in quantity demanded refers to variation in the amount of commodity demanded by consumers in a definite period of time. Change in quantity demanded of a commodity results to movement along the demand curve of the particular commodity (Wells, 2010). Change in quantity demand does not cause a shift in the demand curve but rather a movement along the demand curve (Bertola, Foellmi, & Zweimüller, 2006). Change in quantity demanded can be explained in terms of contraction and expansion of demand due to changes in the price of a product. Expansion of demand occurs when there is an increase in the quantity of a product demanded due to a decrease in the price of the product. On the other hand, contraction of demand occurs when there is a reduction in the quantity of a product demanded due to an increase in the price of a product.
Changes in supply and changes in quantity supplied are two different economic concepts. Change in supply refers to shifts in the supply curve of a product. It refers to either a reduction or an increase in the number of products being supplied to the market (Lund, 2017). Changes in supply are caused by variation in several determinants, such as production costs and government policies, while the price of the commodity is maintained at a constant. Change in supply is represented by either a left or right shift in the supply curve of a product. A shift to the left of the supply curve implies a reduction in the quantity of supply, while a shift to the right implies an increase in the quantity of supply.
As opposed to change in supply, change in quantity supplied refers to changes in quantity offered for sale and is largely due to changes in the price of a commodity. Change in quantity supplied results in movement along the supply curve (Lund, 2017). Change in quantity supplied can also be explained in terms of contraction and expansion of the number of products supplied to the market. An increase in the price of goods will increase the number of goods supplied, and therefore, an expansion in the quantity of supply. On the other hand, a reduction in the price of a commodity will lead to a reduction in the number of goods supplied, and therefore, a contraction in the quantity of supply.
With demand held at a constant, change in the quantity of a product demanded can only be caused by a change in the price of the product. Change in quantity demanded is only realized by variation in the price of the product (Lund, 2017). Change in demand for a product, on the other hand, is caused by a variation of various determinants. According to Lund, 2017 numerous factors influence the demand for a commodity in an open market, such as consumer tastes and preferences, consumers’ income, price of complementary and substitute goods, and consumer’ expectations of future prices. These factors affect the demand for products in different ways. For example, a reduction in the price of close substitutes of a given product will increase the demand for the product.
Tastes and preferences of the consumer are vital in determining the demand for a product. A good that satisfies the tastes and preferences of consumers or is tailored to the expectation of the consumers always have a higher demand compared to those that do not satisfy consumer tastes. Consumers’ tastes and preferences always vary, therefore, leading to changes in demand and shifts in the demand curve (Wells, 2010). The number of consumers in a market also affects the demand of products as the greater the number of consumers, the greater the market demand.
Changes in consumers’ income can either positively or negatively affect the demand for goods. Consumers’ income determines their purchasing power. Consumers’ purchasing power determines consumers’ ability to buy commodities needed to satiate their needs and wants. The general rule is that an increase in a consumer’s income leads to an increase in demand (Lund, 2017) However, there are variations to that general rule, which are caused by different types of goods.
There are two types of consumer goods: normal goods and inferior goods. Normal goods are those goods whose demand increases with an increase in consumers’ income, and demand decreases with a decrease in consumers’ income (Wells, 2010). Inferior goods, on the other hand, experience a reduction in their demand with an increase in consumers’ income. According to Wells (2010), inferior goods are not of inferior quality but are rather goods that portray an inverse relationship between income and demand.
Changes in prices of related goods also result in changes in the demand for particular products. Related goods are divided into complementary and substitute goods. Complementary goods are goods whose use is related to the use of another and have to be used together. A good example of complementary goods is a printer and an ink cartridge – printers and ink cartridges have little values alone until combined to be used in printing. Supplementary goods, on the other hand, are goods that are used together, and therefore, have to be used in tandem. A good example of supplementary goods are vehicles and fuel – a car cannot operate without fuel.
In the case of complementary goods, an increase in the demand for one good leads to an increase in the demand for another good. For example, an increase in the demand for printers will automatically lead to an increase in the demand for ink cartridges. On the other hand, supplementary goods have a negative cross elasticity of demand with an increase in the price of one product leading to a reduction in demand for another. For example, an increase in the price of fuel will lead to a decrease in the demand for cars.
Bertola, G., Foellmi, R., & Zweimüller, J. (2006). Dynamic Interactions of Demand and Supply. In Income Distribution in Macroeconomic Models (pp. 321-338). Princeton University Press.
Lund, B. (2017). Need, demand, and supply. In Understanding housing policy (3rd edition) (pp. 103-126). Bristol, UK; Chicago, IL, USA: Bristol University Press.
Wells, G. (2010). Teaching aggregate demand and supply models. The Journal of Economic Education, 41(1), 31–40. DOI: 10.1080/00220480903382313