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Questions
Distinguish Between:
Expansion of supply and Contraction of supply
Distinguish between the following.
Extension of supply and contraction of supply.
Solution
| Sr. No. | Expansion of supply | Contraction of supply |
| 1. | Expansion of supply refers to the rise in the quantity supplied of a commodity only due to a rise in its price. | Contraction in supply refers to a fall in the quantity supplied of a commodity only due to a fall in its price. |
| 2. | Extension in supply takes place only due to a rise in price. All other factors are constant and have no effect on the supply of the commodity. | Contraction takes place only due to a fall in price. All other factors are constant and have no effect on the supply of the commodity. |
| 3. | It is shown by an upward movement along the same supply curve. | It is shown by a downward movement along the same supply curve. |
| 4. | In expansion in supply, the equilibrium point moves upwards from the left to the right on the same supply curve. | In contraction in supply, the equilibrium point moves downwards from the right to the left on the same supply curve. |
| 4. |  |
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RELATED QUESTIONS
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Study the following diagram and answer the questions:
Questions:
- When the price rises from 10 to 15, supply rises from 12 to `square`.
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