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What is the Concept of Movement along the Demand

(a) MEANING OF MOVEMENT ALONG THE DEMAND CURVE

Keeping all other factors the same, when there is a change in demand of a commodity due to change in price, it is referred to as the change in quantity demanded. It is shown as a movement along the demand curve when expressed graphically.

(b) UPWARD MOVEMENT OF DEMAND CURVE

  • When the price of the commodity rises, the quantity demanded falls. It leads to the upward movement of the demand curve.
  • It is also known as contraction of demand.

(c) DOWNWARD MOVEMENT OF DEMAND CURVE

  • When the price of the commodity falls, the quantity demanded rises. It leads to the downward movement of the demand curve.
  • It is also known as expansion of demand.

(d) DIAGRAM

(e)EXPLANATION OF DIAGRAM

  • When price rises from OP to OP2 demand falls from OQ to OQ2. This is known as contraction of demand.
  • When price falls from OP to OP1 demand rises from OQ to OQ1. This is known as expansion of demand.

Lets Practice

1. Contraction in demand leads to_________________ ?

(a) Upward movement along the demand curve

(b) Downward movement along the demand curve

(c) Leftward shift in demand curve

(d) Rightward shift in demand curve

Answer:

(a) Upward movement along the demand curve

2. The change in demand of a commodity due to increase in its price is called:

(a) Extension in demand

(b) Contraction in demand

(c) Increase in demand

(d) Decrease in demand

Answer:

(b) Contraction in demand

3.The upward movement along a demand curve is known as

(a) Contraction in demand

(b) Expansion in demand

(c) Either (a) or (b)

(d) None of the above

Answer:

(a) Contraction in demand