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Supply and Demand Curves Movements and Representations

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Answer true or false and if the statement is false, change it to make it true.

A. An increase in demand is represented by a movement up the demand curve.
B. An increase in supply is represented by a movement up the supply curve.

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Solution Summary

An increase in demand is studied.

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An increase in demand is represented by a movement up the demand curve.

This statement is false.
There are two main things to note here.

1. The only time there is a movement along the demand curve is when there is a change in price.
This is referred to as a "change in the quantity demanded". A movement along the curve (upwards or 'leftwards') would be the result of an increase in price.
2. A "change in demand" causes a shift in the whole demand curve. This is caused by factors such as change in income, price of substitute and complementary goods and consumer tastes.

A correct statement would be:
"An increase in demand is represented by a shift in the demand curve from left ...

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