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♪ [music] ♪

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- [Narrator] Economists
use similar terms

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for two things
which are quite different:

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a change in the quantity demanded
versus a change in demand.

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It can be a little confusing,
so let's review.

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A change in quantity demanded

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refers to a movement
along a fixed demand curve --

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that's caused by a change in price.

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Change in demand refers to
a shift in the demand curve --

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that's caused by one
of the shifter's income,

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preferences, changes
in the price of goods and so on.

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Let's illustrate the difference
with a refreshing example.

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We'll use soda.

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Um, don't you mean pop?

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That's coke, y'all!

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Actually, soft drink
is the most accurate term, so...

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- [Narrator] Fine, we'll just use
sugary, fizzy drink, okay?

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First, let's recall a change
in the quantity demanded.

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Suppose the price
on sugary, fizzy drinks

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goes from $3 to $4.

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What happens?

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Well, the quantity demanded
decreases from 200 to 250.

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There's a decrease
in the quantity demanded

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marked by movement
along the demand curve.

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But there's no change
in the existing demand curve.

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Now, let's look at
a change in demand,

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in this case, decrease
in the demand of

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(sighs) sugary, fizzy drinks

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caused by a viral
marketing campaign

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for naturally sweetened,
sparkling water.

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People just aren't as excited
about sugary, fizzy drink anymore.

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The decrease in demand
shifts the entire demand curve

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down into the left

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and leaves, as we know,
to a lower quantity at every price.

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In the first case, on the left,

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we have a decrease
in the quantity demanded --

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that is a movement
along a fixed demand curve.

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In the case on the right,
we have a decrease in demand,

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the entire demand curve
shifts down into the left.

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An easy way to remember this

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is that our graph track changes
in price and quantity.

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If a change occurs in a variable
other than price or quantity --

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that is, something
not measured on either axis --

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that will represent a shift
in the demand curve.

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Prices on the vertical or y-axis,
so change in price alone,

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will cause movement
along the curve.

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A change in income,
population, tastes, etc. --

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none of these are measured
on either axis

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and thus, we'll see a shift
in the entire demand curve.

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So there you have it.

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Similar terminology
can be confusing,

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but if you follow the curves, 
you won't have to worry.

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If you're a teacher,

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you should check out
our supply in demand [ ]

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that incorporates this video.

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If you're a learner,
make sure this video sticks

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by answering a few
quick practice questions.

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Or if you're ready
for more microeconomics,

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click for the next video.

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♪ [music] ♪