Understanding Change in Demand and Supply Curve and Impact of Trump's Protectionist Policies

Running head: BUSINESS ECONOMICS
Business economics
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1BUSINESS ECONOMICS
Introduction
Economical factor is one of the major factors to be considered by the businesses in the
current time. This applies in both trade approach of the countries and the relationship between
price and quantity demanded. In this essay, the difference between the change in quantity
demanded and the change in demand will be discussed with the help of demand and supply
curve. In addition, the adverse impacts of the Trump’s protectionist policies will also be
discussed in terms of comparative and absolute advantages.
Change in demand and shift in quantity demanded
Change in the demand refers to the movement along the demand curve. This happens
when the demand for a certain good change with the change in its price. According to the law of
demand, price and demand is having inverse relationship and they both flow in opposite
directions. Thus, increase in price will lead to decrease in the demand and vice versa (Obizhaeva
& Wang, 2013).

2BUSINESS ECONOMICS
Figure: 1
Change in demand curve
According to the above graph, the movement is noticed along a single demand curve.
When the price changes from P1 to P2, quantity changes from Q1 to Q2. This led to the
movement across the demand curve. However, in this case, different determining factors other
than the price such as customer preference, income and substitutes are considered constant
(Vivekananthan et al., 2014). Therefore, these factors can also make change in the quantity
demanded even without any change in the price.
Figure: 2
Change in quantity demanded
The above figure shows that even the price is constant at P, quantity demanded changes
from Q1 to Q2. This led to shift in the demand curve.