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Class : 11
Unit : Economics


Change in Demand. What is movement along the demand curve?

Ans : When there is change in quantity demand only because of change in price other things remaining constant then it is known as movement along the demand curve. It explains how the price – quantity combination move from one point to another of the same demand curve. When change in demand is caused by change in price then it is called extension or contraction in demand. It is also known as change in quantity demand. The concepts of extension (expansion) or contraction in demand are explained below: a) Extension in demand:- When quantity demanded for a commodity increases due to fall in price. It is known as extension in demand. It is also known as increase in demand. In this case the consumer moves downward along the same demand curve. b) Contraction in demand:- When quantity demanded for a commodity decreases due to increase in price. It is known as contraction in demand. It is also known as decrease in quantity demand. In this case, the consumer moves upward along the same demand curve. The concept of movement along the demand curve can be explained with the following diagram. In this given diagram, ox-axis represents quantity demand and oy-axis represent price. DD is the demand curve which slopes downward from left to right. At initial price OP, quantity demand is OM. At this situation consumer is at point A of the demand curve. When price decreases from OP to OP₁, the quantity demand increases from OM to OM₁. At this situation consumer is at point ‘B’ of the demand curve. This movement from point ‘A’ to point ‘B’ is known as extension in demand. Again price increases from OP to OP₂, the quantity demand decreases from OM to OM₂. At this situation consumer is at point ‘C’ of the demand curve. This movement from point ‘A’ to point ‘C’ is known as contraction in demand.
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