[Anonymous]

I understand macroeconomics pretty well and typically have a good understanding of micro, but for whatever reason, the quantity supplied/demanded is not clicking. I’m just wondering if someone out there who does understand this topic can tell me if my understanding is correct and/or add some insight.

So, when there is a change in the quantity demanded or supplied, the point will slide up and down the demand curve, vs when there is a change in the demand or supply, the curve will actually shift to the left or the right. My understanding is that the change in quantity results solely from a change in price and it is inversely related. So, if the price goes up, the demand curve won’t shift, but the demand point will slide up the demand curve, however an increase in price would cause a decrease in quantity demanded. Is this a correct understanding?

[Jsmith87]

Yes, the change in quantity supplied or demanded results from a change in price. Its an inverse relation with demand and a direct relation with supply. The higher the price, the less quantity demanded (inverse). The higher the price, the more quantity supplied (direct).

Do you ever draw the supply and demand graphs to help you solve conceptual problems? I always found it helpful.

[Anonymous]

Thanks! I do draw the graphs out but for whatever reason, the quantity demanded/supplied was really confusing me. I think I'm understanding it more as I'm going through the MCQs.

[M.O.D.]

It helps if you differentiate the causes. Why would the qty change, vs why would the entire curve shift?

Curves shift due to a change in demographics, technology, incomes, etc.

Points on existing curves change due to govt intervention such as price floors or ceilings.

I think of movement along the curve to be temporary because the markets will want to return to equilibrium, whereas shifts in the curves are permanent because changes in population or technology are permanent.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[Author]

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