Question

Please explain what is the difference between a change in demand versus a change in quantity demanded? Why is it so important to differentiate between these similar-sounding terms? What role do elasticities play in the decisions that individuals and firms make? Consider a product you recently purchased – please state the product, and explain if you feel its demand is elastic, or inelastic, and why.

Answer 1

A change in demand means a shift in a consumer's desire to a particular good or service irrespective of price variations while a change in the quantity demanded explains a change in the amount of goods or services a consumer is willing purchase largely influenced by the demand price. It has become important to differentiate between this terms as they sound alike representing different meanings in economics. Price elasticity of demand influences the choices individual and firms make as it goes to show if the demand for a particular amount of goods will drop sharply or if the demand would remain same even as price increases. A perfect example is currently the issue of protective gears used to forestall the spread of the ravaging Covid-19. The demand for Face masks have increased as both individuals and health care givers need them with the latter requiring them the most. The increased demand has also seen to the increase in price and this does not affect the amount demanded as the price continues to increase following its rise in demand. This explains the inelasticity of demand.