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

• A. A change in demand results in movement along the demand curve, while a change in quantity demanded shifts the demand curve.
• B. A change in demand is caused only by changes in the price of the good, while a change in quantity demanded is caused by changes in consumer income.
• C. A change in demand refers to a shift of the entire demand curve due to factors like income or preferences, while a change in quantity demanded refers to movement along the demand curve caused by a change in the good's own price.
• D. Both a change in demand and a change in quantity demanded are caused by changes in the price of related goods.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of 'quantity demanded' which refers to the specific amount of a good consumers are willing and able to buy at a particular price, holding all other factors constant.
2. Step 2: Recognize that a 'change in quantity demanded' occurs when there is a movement along the same demand curve due to a change in the price of the good itself. This means the demand curve does not shift; instead, you move to a different point on the curve.
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 and preferences, 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 price-driven movement along the curve, while a change in demand is a shift of the entire curve caused by non-price factors.
5. Step 5: Summarize that the correct description is: 'A change in demand refers to a shift of the entire demand curve due to factors like income or preferences, while a change in quantity demanded refers to movement along the demand curve caused by a change in the good's own price.'