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प्रश्न
What is contraction in demand?
What is meant by contraction of demand?
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उत्तर
Contraction of demand refers to a fall in the quantity demanded due to a rise in the price of a commodity, other factors remaining constant. It is also known as a decrease in quantity demanded. It can be illustrated with the help of an example and a diagram.
| Price of X Per Unit (₹) | Quantity Demanded (X) (Unit) |
| 3 | 30 |
| 5 | 20 |
The figure illustrates the situation of contraction of demand when the price rises from ₹ 3 to ₹ 5, demand falls from 30 to 20 units. This fall in demand results in a movement from point B to point A along the same demand curve, as shown in the figure.
APPEARS IN
संबंधित प्रश्न
Explain briefly anyone determinant of an exceptional demand curve.
Distinguish between:
Inferior goods and superior goods
State with reason whether you agree or disagree with the following statement:
When the price of Giffen goods falls, the demand for it increases.
Statements that explain Giffen’s paradox:
- It is an exception to the law of demand.
- It is applicable to inferior or low quality goods.
- Demand increases when the prices of inferior goods fall
- It was identified by Prof. Alfred Marshall.
State with reason whether you agree or disagree with the following statement:
When the prices of Giffen goods falls, demand for such goods rises.
State with reason whether you agree or disagree with the following statement:
There are no exceptions to the law of demand.
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Questions:
- Diagram’ A ‘represents _____in demand (1m)
- Diagram ‘B’ represents _____in demand (1m)
- In diagram ‘A’ movement of demand curve is in_____ direction (1m)
- In diagram ‘B’ movement of demand curve is in______ direction (1m)
State with reason whether you agree or disagree with the following statement.
When price of Giffen goods fall, the demand for it increases.
State with reason whether you agree or disagree with the following statements:
When price of Giffen goods fall, the demand for it increases.
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
When price of Giffen goods fall, the demand for it increases.
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
In which exception to the law of demand does the consumer equate price and quality.
State with reasons whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
Mention one exception to the law of demand. Give one point only.
State two circumstances under which the demand curve slopes upwards to the right.
Explain the following diagram with reference to the concept of Giffen goods.
Why are prestige good an exception to the law of demand?
Why do people buy more luxury goods when prices go up, defying the usual law of demand?
Which exception to the law of demand is primarily based on consumer beliefs about product quality?
What happens to the demand for necessities like salt or electricity when their prices increase?
Which situation is an example of speculation affecting demand?
