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Distinguish between Increase in demand and Decrease in demand. - Economics

Distinguish Between

Distinguish between

Increase in demand and Decrease in demand.

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Solution

  Increase in Demand Decrease in Demand
1) When more quantity is demanded than before at the same price, it is called an increase in demand. When less quantity is demanded than before at the same price, it is called a decrease in demand.
2) Increase in demand takes place due to favourable changes in factors other than price like fashion, income, taxation policy, advertisements, etc. Decrease in demand takes place due to unfavourable changes in factors other than price like fashion, income, taxation policy, advertisements, etc.
3) An increase in demand is indicated by a shift in the demand curve to the right. A decrease in demand is indicated by a shift in the demand curve to left.
4) When there is an increase in demand, the demand curve shifts to the right from DD to D1​D2​ as shown in the figure.
When there is a decrease in demand the demand curve shift to the left from DD to D2​D2​ as shown in the figure.
Concept: Demand Analysis
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APPEARS IN

Balbharati Economics 12th Standard HSC Maharashtra State Board
Chapter 3.1 Demand Analysis
Exercise | Q 3. (3) | Page 25
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