Demand Curve vs. Supply Curve

Another cornerstones in Economics is the demand curve and supply curve.

(If needing to understand demand and supply, go to the Demand vs. Supply post.)

The demand curve slopes downward as a result of the negative relationship established by the Law of Demand.

The supply curve slopes upward as a result of the positive relationship established by the Law of Supply.

Movement vs. Shift

This dynamic tends to be a big complexity for college students learning Economics.

It is really simple.

With movement,

• it is along the demand curve when there is a change in price involving demand (buyers) or

• it is along the supply curve when there is a change in price involving supply (sellers).

With shift,

• the demand curve shifts when there is a change in income, prices of related goods, tastes, expectations, and number of buyers

  or

• the supply curve shifts when there is a change in input prices, technology, expectations, and number of sellers.