Advertisements
Advertisements
Question
Define contraction of demand (or decrease in quantity demanded).
Solution
When the quantity demanded of a commodity falls due to a rise in its own price of the commodity, other factors remaining constant, it is called a contraction of demand or a decrease in the quantity demanded.
APPEARS IN
RELATED QUESTIONS
What is meant by the contraction in demand?
If Coke and Fanta are close substitutes to each other, a rise in price of Coke will lead to ______ for Fanta.
As a result of rise in consumer's income, the demand curve for coarse-grain (inferior good) will:
What does an upward movement along the same demand curve indicate?
What is a decrease in demand?
Explain the following diagram:
Distinguish between 'movement along the demand curve' and shift of a demand curve.
The following table shows a change in the demand. Read the table carefully and answer the question that follows:
| Case I | Case II | ||
| Price (₹) | Quantity | Price (₹) | Quantity |
| 10 | 20 | 10 | 20 |
| 10 | 10 | 5 | 20 |
What type of change is it, decrease in demand or contraction in demand? Give a reason.
Explain the following diagram.
State whether the following statement is true or false. Give reasons.
A change in quantity demanded as a result of price change will imply a shift of the demand curve to the right.
