Q.3. Distinguish between. Increase in demand and Decrease in demand.

Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board 

 

Chapter 3 -(A) Demand Analysis [Latest edition]

Q.3. Distinguish between

Increase in demand and Decrease in demand.

Increase in Demand	Decrease in Demand
a) An increase in demand refers to a rise in demand due to changes in other factors, price remaining constant.	a) A decrease in demand refers to fall in demand due to changes in other factors, price remaining constant.
b) An increase in demand occurs when more are purchased at the same price and the same quantity is purchased at a higher price.	b) A decrease in demand occurs when less is purchased at the same price or the same quantity at a lower price.
c) Increase in demand is a result of (1) Increase in income (2) Increase in price of substitutes (3) Decrease in price of complementary goods (4) Increase in population/ (5) When goods are in fashion.	c) Decrease in demand is a result of (1) Decrease in income. (2) Decrease in price of substitutes. (3) Increase in price of complementary goods. (4) Decrease in population. (5) When goods go out of fashion.
d) When there is an increase in demand, the demand curve shifts to the right from DD to D1​D2​ as shown in the figure.	d) When there is decrease in demand the demand curve shifts to the left from DD to D2​D2​ as shown in the figure.