Q.Explain the concepts of variation and changes in demand with the help of diagrams.

Variation in demand = movement along the same curve due to a price change (expansion/contraction); change in demand = a shift of the whole curve due to non-price factors (increase/decrease).

The two concepts explain why the quantity demanded alters, but for different reasons.

A. Variation in Demand (Movement along the curve):

This happens when only the price of the commodity changes, other factors (income, tastes, prices of related goods) staying constant. The consumer moves from one point to another on the same demand curve.

• Expansion (Extension) of Demand — When price falls, quantity demanded rises; there is a downward movement along the same curve.
• Contraction of Demand — When price rises, quantity demanded falls; there is an upward movement along the same curve.
• Diagram: On a single downward-sloping demand curve DD, a fall in price from OP to OP1 moves the point from A to B (expansion), and a rise in price moves it back up (contraction) — all on the same curve.

B. Changes in Demand (Shift of the curve):

This happens when factors other than the good's own price change — income, tastes and preferences, prices of substitutes and complements, expectations. The whole demand curve shifts to a new position while price stays the same.

• Increase in Demand — More is demanded at the same price (e.g. higher income); the demand curve shifts to the right, from DD to D1D1.
• Decrease in Demand — Less is demanded at the same price; the demand curve shifts to the left, from DD to D2D2. …