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Questions
What is meant by the contraction in demand?
State contraction in Demand.
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Solution
Other things being the same, when the demand for a product falls as a result of the rise in its price, it is termed a contraction in demand. There will be an upward movement along the same demand curve.
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RELATED QUESTIONS
What is meant by an increase in demand?
If Coke and Fanta are close substitutes to each other, a rise in price of Coke will lead to ______ for Fanta.
With the help of a graph explain the increase in demand concept.
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| Case I | Case II | ||
| Price (₹) | Quantity | Price (₹) | Quantity |
| 10 | 20 | 10 | 20 |
| 10 | 10 | 5 | 20 |
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