InterviewSolution
Saved Bookmarks
InterviewSolution
| 1. |
Contraction in demand |
| Answer» Contraction of demandThere is contraction of demand for a commodity when there is increase in the price of commodity. When price is 10 dollars per kilogram the demand is 40 kilograms. When price increases to 20 dollars there is contraction of demand from 40 to 30 kilograms.\tPriceDemand$1040 kg2030\tThe diagram shows contraction of demand. Quality of demand is shown on OX axis. The price is shown on OY axis. DD is demand curve. When price increases the quantity demanded comes down and demand curve moves upward. | |