What is the difference between a change in quantity demanded and a change in demand explain and illustrate your answer graphically?

A change in demand describes a shift in consumer desire to purchase a particular good or service, irrespective of a variation in its price. The change could be triggered by a shift in income levels, consumer tastes, or a different price being charged for a related product.

• A change in demand represents a shift in consumer desire to purchase a particular good or service, irrespective of a variation in its price.
• The change could be triggered by a shift in income levels, consumer tastes, or a different price being charged for a related product.
• An increase and decrease in total market demand is represented graphically in the demand curve.

Demand is an economic principle referring to a consumer's desire to buy things. There are a number of factors that influence market demand for a particularly good or service. The main determinants are:

• Income: How much consumers have to spend.
• Consumer preferences: What types of products are popular at any given moment.
• Buyer expectations: Does the consumer expect the price to rise in the future, perhaps due to limited supply?
• Price: How much does the good or service cost?
• Prices of related items: Are there any substitute goods or services of similar value that cost a lot less?

A change in demand occurs when appetite for goods and services shifts, even though prices remain constant. When the economy is flourishing and incomes are rising, consumers could feasibly purchase more of everything. Prices will remain the same, at least in the short-term, while the quantity sold increases.

In contrast, demand could be expected to drop at every price during a recession. When economic growth abates, jobs tend to get cut, incomes fall, and people get nervous, refraining from making discretionary expenses and only buying essentials.

An increase and decrease in total market demand is illustrated in the demand curve, a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. Typically, the price will appear on the left vertical y-axis, while the quantity demanded is shown on the horizontal x-axis.

The supply and demand curves form an X on the graph, with supply pointing upward and demand pointing downward. Drawing straight lines from the intersection of these two curves to the x- and y-axes yields price and quantity levels based on current supply and demand.

Consequently, a positive change in demand amid constant supply shifts the demand curve to the right, the result being an increase in price and quantity. Alternatively, a negative change in demand shifts the curve left, leading price and quantity to both fall.

It is important not to confuse change in demand with quantity demanded. Quantity demanded describes the total amount of goods or services demanded at any given point in time, depending on the price being charged for them in the marketplace. Change in demand, on the other hand, focuses on all determinants of demand other than price changes.

When an item becomes fashionable, perhaps due to smart advertising, consumers clamor to buy it. For instance, Apple Inc.'s iPhone sales have remained fairly constant, despite undergoing various price increases over the years, as many consumers view it as the number one smartphone in the market and are locked into Apple's ecosystem. In various parts of the world, the Apple iPhone has also become a status symbol, illustrating inelastic demand just as Nokia Corp.'s cellphones did in the early 2000s.

Technological advancements and fashion trends aren't the only factors that can trigger a change in demand. For example, during the mad cow disease scare, consumers started buying chicken rather than beef, even though the latter's price had not changed.

Chicken could also find itself in favor if the price of another competing poultry products rises significantly. In such a scenario, demand for chicken rockets, despite still costing the same at the supermarket. Alternatively, if there is a perceived increase in the price of gasoline, then there could feasibly be a decrease in the demand for gas-guzzling SUVs, ceteris paribus. 

Have you ever observed why the inessential things like diamonds, platinum, gold are very expensive, whereas necessities like food, clothes, water are inexpensive? The only answer to this question is the law of demand, which determines how consumer demand is affected by different factors like price, income, substitute or complementary goods, tastes & preferences and so forth.

Many people often juxtapose the terms demand and quantity demanded in this context. So, let’s take a look at this article in which we’ve simplified the differences.

Content: Demand Vs Quantity Demanded

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

Definition of Demand

Demand is defined as the amount of product or service that a consumer or a group of consumers are willing and able to buy at different prices, at a given period. A simple desire to purchase a commodity does not constitute demand as it is not effective, however, ‘desire’ is the major component of it. Effective demand is a combination of three elements, desire, means to purchase and willingness to utilize those means for buying. A demand is not considered as demand if it is not supported by the ability to pay the price of the product.

Therefore demand can be explained at different quantities of a product or service, which could be purchased at various prices/income/price of related goods at a given period. The figure given below represents the shift in demand curve due to various factors such as income, taste or preferences, the price of complementary or substitute goods etc. The rightward shift represents an increase in demand and the leftward shift is an indicator of the decrease in demand.

Definition of Quantity Demanded

Quantity Demanded refers to how much of an economic good or service is demanded by a consumer or a group of consumers at a given period at a certain price. There are two important points related to quantity demanded which are,

• It is always expressed at a given price, in essence, different quantities are demanded at different prices.
• It is a flow which means quantity demanded doesn’t indicate a single purchase rather a continuous flow of purchases.

The given below figure represents the movement along demand curve due to changes in price, i.e. the upward movement of demand curve indicates the contraction of demand whereas a downward shift denotes the expansion of demand.

The following points are noteworthy so far as the difference between demand and quantity demanded is concerned:

1. Demand is defined as the willingness of buyer and his affordability to pay the price for the economic good or service. Quantity Demanded represents an exact quantity (how much) of a good or service is demanded by consumers at a particular price.
2. Demand refers to the graphing of all the quantities that can be purchased at different prices. On the contrary, quantity demanded, is the actual amount of goods desired at a certain price.
3. When a person talks about increase or decrease in demand, it means the change in demand. Conversely, if a person talks about expansion or contraction of demand, he refers to the change in quantity demanded.
4. Changes in demand are due to the factors other than price, i.e. income, the price of complementary goods, the price of substitutes, etc. On the other hand, changes in quantity demanded is due to price.
5. Change in demand will result in the shift in the demand curve. As opposed to quantity demanded, where the change may lead to the movement along the demand curve.

Conclusion

Demand is inversely related to price, i.e. with the increase in price, the demand for the product or service decreases whereas a decline in the price of the product or service may cause a rise in its demand. Further, it can be represented by a curve that shows the relationship between price and quantity demanded. On the other hand, quantity demanded is a particular point on the demand curve.