Distinguish between extension and contraction of demand. – InterviewSolution

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1.	Distinguish between extension and contraction of demand.
Answer» The demand for a commodity changes DUE to a CHANGE in price. It is called extension and contraction of demand. When there is decrease in price of commodity there is in increase in demand of that commodity. This is called extension of demand. When there is increase in price of a commodity there is decrease in the demand for that commodity. This called contraction of demand. THUS demand varies in OPPOSITE direction due to change in price.

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