What's the difference between increase of demand and extension of demand
EXTENSION IN DEMAND AND INCREASE IN DEMAND
In common terms Extension in demand and Increase in demand
are taken in the same sense, but in economics they express different situations,
the same with contraction and decrease in demand. Which can be discussed below?
EXTENSION IN DEMAND;
Other things remaining the same, when
more commodities are purchased with the fall in its price, that’s called extension
in demand. It is shown below with the help of diagram, in which demand curve
slops downwards along with the same demand curve.
In the diagram
the movement of demand from point A to B along with the same demand curve shows
the extension of demand. It shows as the price falls from P TO P1 the demand increases
from D to D1
SUPPOSE,
PRICE
|
10
|
5
|
DEMAND
|
5
|
10
|
Here we notice that as the price falls from P to P1 the demand increases from D to D1, that causes the original point A moves downwards to B along with the same demand curve
INCREASE IN DEMAND; This is the situation where due to other factors, the more quantity is
demanded with the same in its price , or the same quantity is demanded with the
rise in its price ,this indicates the increase in demand . Here the demand
curve shifts from upwards
With the help
of an example you will clearly understand, First did you know the other factors
, that is responsible for that , ok , they are ..
1.
Rise income of the consumer
2.
When the price of the substitute rises
3.
Change in taste
SUPPOSE
When the income of the consumer rises he demand more commodity , or when
the price of the substitute good rises the demands for the original
product increase .Below you can see the
table and diagram of increase in demand .
E-G
PRICE
|
10
|
10
|
DEMAND
|
20
|
30
|
Here we see the demand increases due to other factors , while the price remaining the same, that cause the original demand curve D,D shifts to D1,D OR
PRICE
|
10
|
20
|
DEMAND
|
10
|
10
|
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