There are two types of Change in Demand

• a)      Extension and Contraction

• b)      Rise and Fall in Demand

Extension and Contraction

Extension and Contraction of demand occurs due to change in the price of respective commodity.

Extension means that there is increase in demand due to fall in price

Contraction means that there is decrease in demand due to rise in price

Rise and Fall in Demand

Rise in Demand refers to

Rise in demand even the price remains same.

 No change in Demand with the increase in Price

Fall in Demand refers to

Fall in demand even the price remains same.

No change in Demand with the decrease in Price

Causes of Rise and fall in demand

1. Changes in Income
2. Changes in taste and Fashion
3. Changes in Weather
4. Changes in population
5. Discovery of a substitute
6. Changes in price of Substitute