Question

The following table shows a change in the demand. Read the table carefully and answer the question that follows:

Case	Price (₹)	Quantity (kg)
I	10	20
	10	10
II	10	20
	5	20

What type of change is it - decrease in demand or contraction in demand? Give a reason.

Answer 1

Case I: 

1. The price remains constant at ₹10, but the quantity demanded decreases from 20 kg to 10 kg.
2. This situation could indicate a decrease in demand due to factors other than price, such as a change in consumer preferences, a decrease in income, or the availability of substitutes.
3. It shows a decrease in demand without a change in price.

Case II:

1. The quantity demanded remains constant at 20 kg, even though the price decreases from ₹10 to ₹5.
2. This suggests that the demand for this good is inelastic in this case, meaning that consumers' quantity demanded does not significantly change despite the price drop.
3. It demonstrates that demand is not responsive to a price decrease, which indicates inelastic demand.