Expansion of demand and Contraction of demand.

Question

Distinguish between:

Expansion of demand and Contraction of demand.

Answer 1

Expansion of demand	Contraction of demand
1. Expansion of demand refers to a rise in demand only due to a fall in price.	1. Contraction of demand refers to a fall in the demand due to a rise in price.
2. Expansion of demand takes place solely due to falling in price. All other factors affecting demand remain constant.	2. Contraction of demand takes place solely due to a rise in price. All other factors affecting demand remain constant.
3. Expansion of demand is shown by a downward movement on the same demand curve.	3. Contraction of demand is shown by an upward movement on the same demand curve.