Differentiate between the extension of demand and an increase in demand, using diagrams.

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answered Jun 27, 2020 by BhratJha (42.0k points)
selected Jun 27, 2020 by Renu01

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Basis	Expansion in Demand	Increase in Demand
Meaning	When the quantity demanded rises due to a decrease in the price, Keeping other factors constant, it is known as expansion in demand.	When the demand rises due to a favourable change in the other factors, at the same price, it is known as increase in demand.
Effect on Demand Curve	There is a downward movement along the same demand curve. ( See fig.)	There is a right ward shift (See fig.) in the demand curve.
Reason	It occurs due to decrease in the price of the given commodity .	It occurs due to a favourable change in the other factors like increase in the price of substitutes, decrease in the price of complementary goods. increase in income in case of normal goods. etc.