To an economist, does an increase in demand mean the same thing as an increase in quantity demanded?

• A. No, an increase in demand refers to a rightward shift of the demand curve, while an increase in quantity demanded refers to a movement along the demand curve.
• B. Yes, both terms mean a decrease in price.
• C. Yes, both terms describe the same change in the market.
• D. No, an increase in demand refers to a movement along the demand curve, while an increase in quantity demanded refers to a shift of the demand curve.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the difference between 'demand' and 'quantity demanded'. Demand refers to the entire relationship between price and quantity that consumers are willing and able to buy, represented by the demand curve. Quantity demanded is the specific amount consumers want to buy at a particular price point on that curve.
2. Step 2: Recognize that an increase in demand means the demand curve shifts to the right. This shift indicates that at every price level, consumers are willing to buy more than before, due to factors other than the price of the good itself (e.g., income changes, preferences, prices of related goods).
3. Step 3: Understand that an increase in quantity demanded means movement along the existing demand curve. This happens when the price of the good decreases, causing consumers to buy more, but the demand curve itself does not shift.
4. Step 4: Differentiate the two concepts clearly: a shift in the demand curve (increase in demand) changes the entire demand relationship, while a movement along the curve (increase in quantity demanded) is a response to a price change.
5. Step 5: Apply this understanding to the problem's answer choices to identify that the correct explanation is: 'No, an increase in demand refers to a rightward shift of the demand curve, while an increase in quantity demanded refers to a movement along the demand curve.'