Change in Quantity Demanded Vs. Change in Demand : Economics notes class11-12

Change in Quantity Demanded & Change in Demand :

Change in Quantity Demanded/ Movement Along the Demand Curve :

When the quantity demanded of a commodity change due to the change (rise /Fall) in its own price, remaining other determinants of demand (taste, fashion, price of related goods, etc.) constant, it is known as change in Quantity Demanded.

Types :

1. Expansion of Demand

2. Contraction of Demand

1. Expansion of Demand :

When the quantity demanded of a commodity rises or increases due to the fall or decrease in its own price, other things remaining constant it is called ‘Rise in Quantity Demanded’ or ‘Expansion of demand’.

Example : when price of a apples falls from Rs. 100/kg to Rs. 90/kg, a consumer’s purchase will rise from 1kg to 2kg per week.

This is Expansion of demand.

It is shown by a downward movement along the demand curve.

2.Contraction of Demand :

‘Contraction of Demand’ or . refers to a fall or decrease in the quantity demanded of a commodity due to the rise or increase in its own price, other things remaining constant.

Example: When the price of apples rises from Rs.70/kg to Rs.80//kg a consumer will tend to buy less quantity of apples, 4kg instead of 6kg.

It is shown by an upward movement along a demand curve.

Expansion & Contraction of demand :

Change in Quantity Demanded Vs. Change in Demand : Economics notes class11-12

Change in Demand or Shift in Demand :

Change in Demand refers to the change (rise / fall) in the quantity demanded of a commodity, due to the change in factors other than the own price of the commodity.

It should be noted that a change in demand implies that a larger or smaller quantity will be purchased at each price because of change in other factors (i.e. price of the commodity remain constant).

Types :

1. Increase in Demand

2. Decrease in Demand

1. Increase in demand:

Increase in demand refers to a situation when a consumer buys a larger amount of commodity at the same price.

Increase in demand may take place due to increase in income of consumer, a change in taste of consumer, rise in the price of substitute goods, fall in the price of complementary goods etc.

It is shown by the shifting of demand curve towards right.

Increase in Demand:

2. Decrease in Demand:

Decrease in demand refers to a situation when the consumers buy a smaller quantity of the commodity at the same price.

Decrease in demand may take place due to change in factors other than its own price.

It is indicated by shifting of demand curve towards left.

Decrease in Demand

Also read –

Distinction between–

1. Expansion of Demand &Increase in Demand :

SN	Expansion in Demand	Increase in Demand
1.	It refers to the larger quantity being purchased due to fall in the price of a commodity itself.	It refers to the more quantity being purchased at the same price.
2.	It is due to fall in its own price.	Increase in demand is due to change in other factors affecting demand.
3.	It involves Downward movement Along the same demand curve.	It involves, Rightward Shift of the entire demand curve.

2. Contraction Of Demand & Decrease in Demand:

SN	Contraction In Demand	Decrease in Demand
1.	It refers to the fall in the amount purchased due to rise in a commodity’s own price.	It refers to the decrease in demand means smaller amount being purchased at the same price.
2.	Contraction is due to rise in commodity’s own price.	Decrease in demand is due to changes in ‘other factors’ affecting demand.
3.	It is indicated by Upward movement Along the Same Demand Curve.	It is indicated by Leftward Shift of the entire Demand Curve.

Factors Causing Change in Demand :

SN	Shift Factor	Increase in Demand /Shifting of Demand curve towards Right	Decrease in Demand / Shifting of demand Curve towards Left
1.	Income	Increase in Income	Decrease in Income
2.	Price of Substitutes	Rise in the Price of Substitute goods	Fall in the Price of Substitute goods
3.	Price of Complements	Fall in the Price of Complementary goods	Rise in the Price of Complementary goods
4.	Tastes and Preferences	Favourable change in Tastes and Preferences	Unfavourable change in Tastes and Preferences
5.	Price expectations	Expectations of Rise in Price	Expectation of fall in Price
6.	Population	Increase in Population	Decrease in Population

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