A demand curve (The Law of Demand) answers one question: how much would buyers want at each price, with everything else held fixed? So there are two different ways buying plans can change, and economists use two different names for them.
Key idea
A change in the good's own price causes a change in quantity demanded: a movement along the demand curve. A change in anything else that affects buyers (income, tastes, prices of related goods, expectations, the number of buyers) causes a change in demand: the whole curve shifts. An increase in demand shifts the curve right; a decrease shifts it left.
Why it works
The curve is drawn with the good's own price on an axis, so a change in that price is already "on the map": you move to a different point on the same curve. Income, tastes and the rest are not on either axis. When one of them changes, buyers want a different amount at every price, so every point moves, and that is a new curve.
Worked example: Four headlines about coffee
Classify each: (a) the price of coffee falls; (b) a study links coffee to longer life; (c) incomes fall, and coffee is a normal good; (d) the price of coffee rises.
- (a) Own price: a movement along the curve, an increase in quantity demanded.
- (b) Tastes: buyers want more at every price, an increase in demand (shift right).
- (c) Income: buyers want less at every price, a decrease in demand (shift left).
- (d) Own price: a decrease in quantity demanded, a movement up along the curve.
Answer: (a) and (d) are movements; (b) and (c) are shifts.
Common mistake
Saying "the price fell, so demand increased." A lower price raises the quantity demanded; demand, the whole curve, is unchanged. Mixing the two leads to the "double shift" error later. Check: ask "is the thing that changed this good's own price?" If yes, it is a movement; if no, it is a shift.