WEBVTT 00:00:00.393 --> 00:00:03.211 ♪ [music] ♪ 00:00:13.809 --> 00:00:15.610 - [Narrator] Economists use similar terms 00:00:15.610 --> 00:00:17.628 for two things which are quite different: 00:00:17.628 --> 00:00:23.011 a change in the quantity demanded versus a change in demand. 00:00:23.011 --> 00:00:25.461 It can be a little confusing, so let's review. 00:00:25.461 --> 00:00:27.260 A change in quantity demanded 00:00:27.260 --> 00:00:30.974 refers to a movement along a fixed demand curve -- 00:00:30.974 --> 00:00:32.973 that's caused by a change in price. 00:00:34.057 --> 00:00:38.491 Change in demand refers to a shift in the demand curve -- 00:00:38.491 --> 00:00:41.207 that's caused by one of the shifter's income, 00:00:41.207 --> 00:00:46.457 preferences, changes in the price of goods and so on. 00:00:46.457 --> 00:00:49.225 Let's illustrate the difference with a refreshing example. 00:00:49.225 --> 00:00:51.875 We'll use soda. 00:00:51.875 --> 00:00:53.224 Um, don't you mean pop? 00:00:53.224 --> 00:00:55.108 That's coke, y'all! 00:00:55.108 --> 00:00:58.559 Actually, soft drink is the most accurate term, so... 00:00:58.559 --> 00:01:01.332 - [Narrator] Fine, we'll just use sugary, fizzy drink, okay? 00:01:01.332 --> 00:01:05.025 First, let's recall a change in the quantity demanded. 00:01:05.025 --> 00:01:07.674 Suppose the price on sugary, fizzy drinks 00:01:07.674 --> 00:01:09.973 goes from $3 to $4. 00:01:09.973 --> 00:01:11.459 What happens? 00:01:11.459 --> 00:01:16.658 Well, the quantity demanded decreases from 200 to 250. 00:01:16.658 --> 00:01:19.225 There's a decrease in the quantity demanded 00:01:19.225 --> 00:01:22.240 marked by movement along the demand curve. 00:01:22.240 --> 00:01:25.291 But there's no change in the existing demand curve. 00:01:26.358 --> 00:01:28.942 Now, let's look at a change in demand, 00:01:28.942 --> 00:01:31.658 in this case, decrease in the demand of 00:01:32.593 --> 00:01:34.691 (sighs) sugary, fizzy drinks 00:01:34.691 --> 00:01:37.159 caused by a viral marketing campaign 00:01:37.159 --> 00:01:40.142 for naturally sweetened, sparkling water. 00:01:40.142 --> 00:01:44.259 People just aren't as excited about sugary, fizzy drink anymore. 00:01:44.259 --> 00:01:47.675 The decrease in demand shifts the entire demand curve 00:01:47.675 --> 00:01:49.056 down into the left 00:01:49.056 --> 00:01:53.509 and leaves, as we know, to a lower quantity at every price. 00:02:01.308 --> 00:02:02.791 In the first case, on the left, 00:02:02.791 --> 00:02:05.375 we have a decrease in the quantity demanded -- 00:02:05.375 --> 00:02:08.676 that is a movement along a fixed demand curve. 00:02:08.676 --> 00:02:10.041 In the case on the right, we have a decrease in demand, 00:02:10.041 --> 00:02:15.393 the entire demand curve shifts down into the left. 00:02:15.393 --> 00:02:16.542 An easy way to remember this 00:02:16.542 --> 00:02:20.126 is that our graph track changes in price and quantity. 00:02:20.126 --> 00:02:23.908 If a change occurs in a variable other than price or quantity -- 00:02:23.908 --> 00:02:26.926 that is, something not measured on either axis -- 00:02:26.926 --> 00:02:30.658 that will represent a shift in the demand curve. 00:02:30.658 --> 00:02:34.827 Prices on the vertical or y-axis, so change in price alone, 00:02:34.827 --> 00:02:37.675 will cause movement along the curve. 00:02:37.675 --> 00:02:40.526 A change in income, population, tastes, etc. -- 00:02:40.526 --> 00:02:42.892 none of these are measured on either axis 00:02:42.892 --> 00:02:47.542 and thus, we'll see a shift in the entire demand curve. 00:02:47.542 --> 00:02:48.826 So there you have it. 00:02:48.826 --> 00:02:50.676 Similar terminology can be confusing, 00:02:50.676 --> 00:02:54.225 but if you follow the curves, you won't have to worry. 00:02:57.557 --> 00:02:58.657 If you're a teacher, 00:02:58.657 --> 00:03:00.958 you should check out our supply in demand [ ] 00:03:00.958 --> 00:03:02.706 that incorporates this video. 00:03:02.706 --> 00:03:05.074 If you're a learner, make sure this video sticks 00:03:05.074 --> 00:03:07.826 by answering a few quick practice questions. 00:03:07.826 --> 00:03:10.108 Or if you're ready for more microeconomics, 00:03:10.108 --> 00:03:11.843 click for the next video. 00:03:12.825 --> 00:03:15.226 ♪ [music] ♪