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Question
| Price in (₹) | Quantity demanded (units) |
| 20 | 100 |
| 25 | 70 |
The above example represents a situation of ______.
Options
Increase in demand
Decrease in demand
Contraction of demand
Extention of demand
Solution
The above example represents a situation of Contraction of demand.
Explanation:
The example shows that when the price increases from ₹20 to ₹25, the quantity demanded decreases from 100 units to 70 units. This represents a contraction of demand, which is a movement along the demand curve due to an increase in price, leading to a decrease in the quantity demanded.
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