Which of the following best describes the difference between a change in quantity demanded and a change in demand?

• A. A change in quantity demanded is caused by changes in consumer income, while a change in demand is caused by changes in the good's price.
• B. A change in quantity demanded refers to movement along the demand curve due to a change in the good's price, while a change in demand refers to a shift of the entire demand curve due to factors other than price.
• C. A change in quantity demanded results in a parallel shift of the demand curve, while a change in demand results in movement along the curve.
• D. A change in quantity demanded occurs when supply changes, while a change in demand occurs when production costs change.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of 'quantity demanded' and 'demand'. Quantity demanded refers to the specific amount of a good consumers are willing and able to buy at a particular price, while demand refers to the entire relationship between prices and quantities demanded, represented by the demand curve.
2. Step 2: Recognize that a change in quantity demanded is represented by a movement along the demand curve. This movement happens only when the price of the good changes, holding all other factors constant.
3. Step 3: Understand that a change in demand means the entire demand curve shifts either to the right (increase in demand) or to the left (decrease in demand). This shift is caused by factors other than the good's own price, such as changes in consumer income, tastes, prices of related goods, expectations, or number of buyers.
4. Step 4: Differentiate between the two by noting that a change in quantity demanded is a response to price changes and is shown as movement along the curve, whereas a change in demand is caused by other factors and results in the demand curve shifting.
5. Step 5: Apply this understanding to evaluate the given options and identify the correct description that matches these economic principles.