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shifts from Q1 to Q2. The movement in price (up or down) causes movement along the
supply curve and the quantity demanded will change accordingly. The supply curve has
a upward slope.
Further, for economics, the "movements" and "shifts" in relation to the supply
and demand curves represent very different market phenomena. A movement refers to
a change along a curve. In other words, a movement occurs when a change in the
quantity demanded is caused only by a change in price. A shift in a demand or supply
curve occurs when a good's quantity demanded or supplied changes even though price
remains the same. Shifts in the demand or supply curve imply that the original demand
or supply relationship has changed, meaning that quantity demand or supply is affected
by a factor other than price. Demand : Price of substitutive and complementary goods,
Level of Income, Population, Peoples taste and People prediction. Supply : Production
cost, Number of producers, Price of other goods and services, and Natural disasters
When supply and demand are equal (when the supply function and demand
function intersect) the economy is said to be at equilibrium. At this point, the allocation
of goods is at its most efficient because the amount of goods being supplied is exactly
the same as the amount of goods being demanded.
Finally, supply and demand are two very strong market concepts. Studying the
two of them can give us a good idea of what people like to buy and sell. And we can track
both supply and demand by comparing the price of an item over time.