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Question
Define contraction of demand (or decrease in quantity demanded).
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Solution
When the quantity demanded of a commodity falls due to a rise in its own price of the commodity, other factors remaining constant, it is called a contraction of demand or a decrease in the quantity demanded.
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| Case I | Case II | ||
| Price (₹) | Quantity | Price (₹) | Quantity |
| 10 | 20 | 10 | 20 |
| 10 | 10 | 5 | 20 |
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Contraction of demand is the result of a decrease in the number of consumers.
