A pizza place cuts its price on Tuesdays and sells more slices. Across town, a new dorm opens and another pizza place sells more slices at the same old price. Both sell more pizza, but the graphs look different: one moves along its curve, the other sees the whole curve move. This distinction runs through every graph in the course, and mixing it up is one of the most common ways to lose a graph point.
Every curve holds other things equal
A curve on a market graph shows how the quantity relates to the price, and nothing else. Buyers' incomes, their tastes, the prices of other goods, the number of buyers: all of these matter, but the curve holds them fixed while it shows the price and the quantity. Economists call this ceteris paribus, Latin for "other things equal". It is the rule behind every curve you will draw.
That rule gives a simple test. If the thing that changed is one of the two variables on the axes, you stay on the curve. If it is one of the "other things", the curve itself has to move.
Movement along a curve
When the price of the good changes, and only the price, buyers slide along the same curve to a new point. In the left panel of the figure, the price falls and buyers move from J down to K: a lower price, a larger quantity, the same curve D. Nothing about the curve changed; you just read a different point on it.
Shift of a curve
When one of the other things changes, every point on the curve moves. In the right panel, buyers want more at every price, so the whole curve moves right from D1 to D2. A shift right means a larger quantity at each price; a shift left means a smaller quantity at each price. Right and left are the words to use, because "up" and "down" are ambiguous for a downward-sloping curve.
| Movement along a curve | Shift of a curve | |
|---|---|---|
| Caused by | a change in a variable on one of the axes (on a market graph, the good's own price) | a change in anything else (incomes, tastes, costs, the number of buyers or sellers) |
| On the graph | a new point on the same curve | a new curve, labeled with a new subscript (D1 to D2) |
| Words to use | "moves along", "up along", "down along" | "shifts right", "shifts left" |
Worked example: shift or movement? A coffee shop graphs latte sales with one curve D. Decide what each event does.
- The shop cuts the latte price from $5 to $4. Price is on the vertical axis, so this is a movement down along D to a larger quantity.
- An office building opens next door. More customers want lattes at every price. That is not on either axis, so D shifts right.
- A rival cafe gives away free iced tea. Some customers switch to the free drink, so fewer lattes are wanted at every price: D shifts left. The latte price did not change.
The method: name what changed, check whether it is on an axis, then decide. Never start from "they bought more, so the curve shifted right": buying more can be either one.
Drawing a shift so it scores
On the exam, a shift earns its point only when a reader can see which curve moved and which way. Keep the original curve and label it with subscript 1 (D1). Draw the new curve parallel to it, on the correct side, and label it with subscript 2 (D2). Add an arrow from the old curve to the new one. If a question also asks about the new outcome, you will mark the new meeting point of the two curves, which is the next skill.
The same test works on every graph in the course. Each one has its own variables on the axes and its own list of "other things" that shift its curves, and every unit tells you what those are. The question to ask never changes: is what changed on an axis, or not?