♪ [music] ♪

- [Narrator] Economists
use similar terms

for two things
which are quite different:

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

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

A change in quantity demanded

refers to a movement
along a fixed demand curve --

that's caused by a change in price.

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

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

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

Let's illustrate the difference
with a refreshing example.

We'll use soda.

Um, don't you mean pop?

That's coke, y'all!

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

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

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

Suppose the price
on sugary, fizzy drinks

goes from $3 to $4.

What happens?

Well, the quantity demanded
decreases from 200 to 250.

There's a decrease
in the quantity demanded

marked by movement
along the demand curve.

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

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

in this case, decrease
in the demand of

(sighs) sugary, fizzy drinks

caused by a viral
marketing campaign

for naturally sweetened,
sparkling water.

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

The decrease in demand
shifts the entire demand curve

down into the left

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

In the first case, on the left,

we have a decrease
in the quantity demanded --

that is a movement
along a fixed demand curve.

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

the entire demand curve
shifts down into the left.

An easy way to remember this

is that our graph track changes
in price and quantity.

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

that is, something
not measured on either axis --

that will represent a shift
in the demand curve.

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

will cause movement
along the curve.

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

none of these are measured
on either axis

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

So there you have it.

Similar terminology
can be confusing,

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

If you're a teacher,

you should check out
our supply in demand [ ]

that incorporates this video.

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

by answering a few
quick practice questions.

Or if you're ready
for more microeconomics,

click for the next video.

♪ [music] ♪