Question

Differentiate between Decrease in demand and Contraction of demand.

Answer 1

Decrease in Demand	Contraction of Demand
This is caused by a change in determinants other than the own price of the commodity.	This is caused only by a change in the own price of the commodity.
These include a decrease in income, a decrease in the price of the substitute goods, an increase in the price of the complementary goods, and a change in taste and preferences against the commodity.	An increase in own price of the commodity is the only cause.
Diagrammatically, this is shown as a backward shift in the demand curve.	Diagrammatically, this is shown as an upward movement (right to left) on the same demand curve.