Saved Bookmarks
| 1. |
Distinguish between : (i) Increase and expansion of demand. (ii) Decreas and contraction in demand. |
|
Answer» Solution :(i) Increase in demand is the increase in demand of a commodity owing to any other factor affecting the demand for the commodity other than the own price of the commodity WHEREAS EXPANSION of demand is the increase in demand owing to a FALL in own price of the commodity. Increase in demand leads to a rightward shift in the demand curve whereas expansion of demand leads to a downward MOVEMENT along the same demand curve. (ii) Decrease in demand is the fall in demand of a commodity owing to a change in other factors affecting the demand for the commodity other than the own price of the commodity whereas contraction in demand is the fall in demand of the commodity DUE to an increase in own price of the commodity. Decrease in demand leads to a leftward shift in the demand curve whereas contraction in demand leads to an upward movement along the same demand curve. |
|