Question

Mention any three difference between extension and contraction of demand in three points​

Answer 1

Answer Expert Verified

Answer Expert Verified1) When other things be constant, with rise in price, demand of commodity decrease is called contraction in demand. 2) In the situation quantity demand of commodity decrease. 3) In the situation demand, curve move to upward from the origin. 4) Refer to attachment.

Answer 2

Explanation:

1.Extension of demand refers to a rise in demand only due to fall in price , whereas , contraction of demand refers to a fall in demand only due to rise in price.

2. Extension of demand takes place mainly due to falling in the level of price while all the factors remain constant , whereas , contraction of demand takes place due to rise in price level ,while all the other factors remain constant .

3.Extension of demand is shown by a downward movement on the same demand curve , whereas , contraction of demand is shown by an upward movement on the same demand curve.