(a) MEANING OF MOVEMENT ALONG THE DEMAND CURVE
Keeping all other factors the same, when there is a change in demand of a commodity due to change in price, it is referred to as the change in quantity demanded. It is shown as a movement along the demand curve when expressed graphically.
(b) UPWARD MOVEMENT OF DEMAND CURVE
- When the price of the commodity rises, the quantity demanded falls. It leads to the upward movement of the demand curve.
- It is also known as contraction of demand.
(c) DOWNWARD MOVEMENT OF DEMAND CURVE
- When the price of the commodity falls, the quantity demanded rises. It leads to the downward movement of the demand curve.
- It is also known as expansion of demand.
(d) DIAGRAM
(e)EXPLANATION OF DIAGRAM
- When price rises from OP to OP2 demand falls from OQ to OQ2. This is known as contraction of demand.
- When price falls from OP to OP1 demand rises from OQ to OQ1. This is known as expansion of demand.
Lets Practice
1. Contraction in demand leads to_________________ ?
(a) Upward movement along the demand curve
(b) Downward movement along the demand curve
(c) Leftward shift in demand curve
(d) Rightward shift in demand curve
Answer:
(a) Upward movement along the demand curve
2. The change in demand of a commodity due to increase in its price is called:
(a) Extension in demand
(b) Contraction in demand
(c) Increase in demand
(d) Decrease in demand
Answer:
(b) Contraction in demand
3.The upward movement along a demand curve is known as
(a) Contraction in demand
(b) Expansion in demand
(c) Either (a) or (b)
(d) None of the above
Answer:
(a) Contraction in demand
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