Differentiate Between the Extension of Demand and an Increase in Demand, Using Diagrams. - Economics

Distinguish Between

Answer the following question.
Differentiate between the extension of demand and an increase in demand, using diagrams.



Basis Expansion in Demand Increase in Demand
Meaning When the quantity demanded rises due to a decrease in the price. Keeping other factors constant. it is known as an expansion in demand When the demand rises due to a favorable change in the other factors, at the same price, it is known as an increase in demand.
Effect on Demand Curve There is a downward movement along the same demand curve. ( See fig). There is a rightward shift ( See fig). in the demand curve.

It occurs to decrease in the price of the given commodity



It occurs due to a favorable change in the other factors like an increase in the prices of substitutes, a decrease in the prices of complementary goods, an increase in income in the case of normal goods, etc.

Concept: Movement Along and Shifts in the Demand Curve
  Is there an error in this question or solution?
2014-2015 (March) Set 1

      Forgot password?
Use app×