Change in Demand vs. Change in Quantity Demanded vs Shortage (Excess Demand)
Change in Demand vs. Change in Quantity Demanded and Shortage (Excess Demand) are two Supply & Demand concepts in AP Economics that students often mix up. Change in demand is a shift of the demand curve, while change in quantity demanded is a movement along the demand curve. A shortage occurs when quantity demanded exceeds quantity supplied at a given price. Here is how they compare side by side.
A change in demand occurs when factors like income, preferences, or prices of related goods change, shifting the entire demand curve. A change in quantity demanded occurs when the price of the good itself changes, causing movement along the existing demand curve.
A shortage, or excess demand, happens when consumers are willing to buy more than producers are willing to sell at the current price. This puts upward pressure on the price, as consumers compete to buy the scarce goods. The shortage will be eliminated as the price rises to the equilibrium level.
Shortage vs a Change in Demand: A Gap Is Not a Shift
| Change in Demand vs. Change in Quantity Demanded | Shortage (Excess Demand) | |
|---|---|---|
| What it describes | Whether a curve moved or you moved along it | A gap between two quantities read at one price |
| Curves you need | One curve, before and after | Both curves, evaluated at the same price |
| How it is measured | A horizontal shift, or two points on one curve | Quantity demanded minus quantity supplied |
| Possible at equilibrium | Yes, shifts and movements happen at any price | No, the gap is zero at the equilibrium price |
| How it ends | It does not end, the new curve is the new situation | Price rises and both sides slide along their curves |
| What causes it | A determinant changes, or this good's own price changes | A price stuck below equilibrium, or a shift the price has not caught up with |
| Wording that earns the point | Demand increased | Quantity demanded exceeds quantity supplied |
A shortage is a horizontal gap read at one price, and it says nothing about where either curve sits
Take Qd equal to 150 minus 5P and Qs equal to 30 plus 7P. They clear at a price of 10 with 100 units traded. Now hold the price at 6. Quantity demanded is 150 minus 30, which is 120. Quantity supplied is 30 plus 42, which is 72. The shortage is 120 minus 72, or 48 units. Nothing in that calculation touched either curve. Both equations are letter for letter what they were, and the whole shortage was produced by reading them at a price the market was not going to settle on. That is why excess demand and an increase in demand are not synonyms even though both contain the word demand. An increase in demand is a new schedule with different numbers in it. A shortage is one subtraction performed on the schedules you already have. Say quantity demanded exceeds quantity supplied, because a rubric that sees demand exceeds supply cannot tell whether you meant the gap or a shift.
The same 36 unit shortage can come from either curve, and only one raises quantity
Return to the market clearing at a price of 10 with 100 units. Suppose demand rises by 36 at every price, so the schedule becomes 186 minus 5P. At the old price of 10 buyers now want 136 while sellers still bring 100, a shortage of 36. Alternatively leave demand alone and let supply fall by 36, to 7P minus 6. At a price of 10 sellers bring 64 against 100 wanted, again a shortage of 36. Identical gaps, and both settle at a new price of 13. Yet quantity ends at 121 in the first case and 85 in the second. The gap alone therefore cannot tell you which curve moved, which is exactly why an exam answer has to name the shift before it names the shortage. Watch how the gap closes, too. Between a price of 10 and 13 quantity demanded falls from 136 to 121 and quantity supplied climbs from 100 to 121, both movements along curves that stay put. Test either path at /calculate/equilibrium-price-and-quantity.
Frequently asked questions
Does a shortage mean demand increased?
No. A shortage means quantity demanded exceeds quantity supplied at the price currently being charged, which can happen with a demand curve that never moved. Holding price at 6 in a market that clears at 10 produced a 48 unit shortage above with both schedules unchanged. A shortage can also come from a fall in supply, so the gap by itself identifies no curve.
How do you calculate the size of a shortage?
Plug the given price into both equations and subtract quantity supplied from quantity demanded. With Qd equal to 150 minus 5P and Qs equal to 30 plus 7P, a price of 6 gives 120 and 72, so the shortage is 48 units. Measure the gap horizontally on the diagram, between the two curves at that one price, never vertically.
Does a shortage shift the demand curve?
Neither curve moves while a shortage clears. Rising prices push buyers up along the demand curve and sellers up along the supply curve until the two quantities meet. In the worked case the gap of 36 closes as quantity demanded slips from 136 to 121 and quantity supplied rises from 100 to 121, with both schedules exactly where they started.
Live Supply and Demand graph. Drag the curves, or open the full version.
Related comparisons
Get AP Econ exam tips in your inbox
Occasional emails with study tips, new interactive graphs, and exam-season reminders. Free, no spam.
No spam. Unsubscribe anytime. Read our privacy policy.
Keep track of what you have studied
A free EconLearn account adds progress tracking, your quiz history, and achievements. Studying here is free either way, and there is nothing to pay for as a student.
Create a free accountAlready have one? Sign in
Last updated