Question

distinguish between extension and increase in demand demand

Answer 1

Extension of demand refers to increase in quantity demanded due to decrease in own price of the commodity while increase in demand refers to increase in quantity demanded even when own price of the commodity is constant.

Extension of demand is studied on the assumption that other determinants of demand (other than own price of the commodity) are constant while Increase in demand is studied on the assumption that own price of the commodity is constant.

Extension of demand leads to downward movement along the demand curve from left to right while increase in demand leads to forward shift in demand curve.

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Answer 2

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Increase in demand at the same price due to change in other determinants of the demand curve.. In such a case a shift takes place in the demand curve.
An increases in demand takes place due to following reasons :

when consumer income rises.

the fashion for a good increase, or

tastes and preferences becomes more favourable for the good;

prices of the substitutes of the good in question have risen;

propensity to consume of the people has increased; or

owing to the increase in population and as a result of expansion of the market, the number of consumers of the good has increased.

Expansion in Demand:
Expansion in demand refers to a rise in the quantity demanded due to a fall in the price of commodity.

other factors remaining constant.

It leads to a downward movement along the same demand curve.

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