Question

Statement (1): There is a rightward shift of demand curve in case of increase in demand.

Statement (2): There is a downward movement along the same demand curve in case of expansion in demand.

Options

• Statement 1 is true and Statement 2 is false.

• Statement 2 is true and Statement 1 is false.

• Both the statements are true.

• Both the statements are false.

Answer 1

Both the statements are true.

Explanation:

• Statement (1): An “increase in demand” is a rise in consumer purchasing caused by positive changes in non-price factors (such as increased consumer income or a shift in tastes). This causes the entire demand curve to move to the right.
• Statement (2): An “expansion in demand” is referred to as an increase in the quantity sought induced solely by a decrease in the commodity’s own price, with all other factors remaining constant. This is graphically shown as a downward movement from left to right along the same demand curve.