Question 41 of 41
Q.Distinguish between extension and contraction of demand.
Puducherry TnboardTamil Nadu HSC First Year (DGE) Commerce Board 2026Subjective· 3mImportance★★★★★
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Start your 14-day free trial to unlock the full solution →Extension of demand = more bought when price falls; contraction of demand = less bought when price rises. Both are movements along the same demand curve caused by the good's own price, not shifts of the curve.
When the price of a good changes and all other factors (income, tastes, prices of related goods) stay constant, the quantity demanded changes along the same demand curve:
- Extension of demand — when the price falls, the quantity demanded rises. This is shown as a downward movement along the same demand curve.
- Contraction of demand — when the price rises, the quantity demanded falls. This is shown as an upward movement along the same demand curve.
| Basis | Extension of demand | Contraction of demand |
|---|---|---|
| Cause | Fall in the good's own price | Rise in the good's own price |
| Effect on quantity | Quantity demanded increases | Quantity demanded decreases |
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