Variation in Demand:
1. Variation in demand refers to changes in quantity demanded due to changes in price, other things remaining constant.
2. There are two types of variation in demand:
(a) Expansion or Extension in demand.
(b) Contraction in demand.
3. When price rises, quantity demanded falls, it is known as contraction and when price falls quantity demanded rises, it is known as expansion.
4. Variation in demand are shown by a movement along the same demand curve. Upward movement indicates contraction and downward movement indicates expansion.
Changes in Demand:
1. Changes in demand refers to changes in quantity demanded due to changes in factor other than price like change in income of consumer, size of population, change in fashion, change in price of substitute, etc.
2. There are two types of changes in demand:
(a) Increase in demand
(b) Decrease in demand
3. Increase in demand means when more quantity is demanded at the same price and decrease in demand means when less quantity is demanded at a same price.
4. Changes in demand are shown by shift in demand curve. Increase in demand is shown by a shift in demand curve to right side and decrease in demand is shown by a shift to the left side.
