indicating more coffee demanded at each price. This shift, as we will see
later in this chapter, will lead to an increase in the price of coffee.
Now consider the second statement—that less coffee is being bought
because of its rise in price. This refers to a movement along the new
demand curve and reflects a change between two specific quantities
demanded, one before the price increased and one afterward.
Possible explanations for the two stories are as follows:
1. A rise in population and income in coffee-drinking countries
shifts the demand curve for coffee to the right. This, in turn, raises
the price of coffee (for reasons we will soon study in detail). This
was the first news story.
2. The rising price of coffee is causing many individual households
to cut back on their coffee purchases. The cutback is represented
by an upward movement to the left along the new demand curve
for coffee. This was the second news story.To prevent the type of confusion caused by our two news stories,
economists use a specialized vocabulary to distinguish between shifts of
demand curves and movements along demand curves.
We have seen that “demand” refers to the entire demand curve, whereas
“quantity demanded” refers to a particular point on the demand curve.
Economists reserve the term change in demand to describe a change in
the quantity demanded at every price. That is, a change in demand refers