Question
Discuss the difference between expansion – constriction and increases – decreases in demand
| Expansion – Contraction in Demand | Increase – Decrease in Demand |
| If all factors remain constant and price of commodity increases, the increase in demand is called expansion of demand. If the price of commodity increase and if demand decreases it is called contraction of demand. | If the price remains constant and other factors change, if there is increase in demand. It is called increase in demand. If demand decreases, it is called decrease in demand |
| Expansion and constriction of demand are caused by the change in price. | All the factors are constant expect price the change in demand is caused by change in other factors. |
| In expansion and contraction of demand, the movement is the same on demand curve. With expansion of demand, consumer moves from point above to point below on demand curve. When contraction of demand takes place, the movement is from downward to upward. | In increase and decrease of demand, demand curve changes. New demand curves are created when there is change in demand. In demand increase new demand curve moves on right side parallel to original demand curve. If demand decreases, a new demand curve parallel to original demand moves on left side parallel to the original demand curve. |
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| 1950-51 | 1990-91 | 2000-01 | 2014-15 (P) |
Agriculture and allied activities | 53.1 | 29.6 | 22.3 | 17.6 |
Industries | 16.6 | 27.7 | 27.7 | 29.7 |
Services (excluding constuction) | 30.3 | 42.7 | 50.4 | 52.7 |
Source : Economic Survey (2014-15)
(1) What does the table represent?
(2) How has the contribution of agriculture to the Indian economy changed over time?
(3) Which sector has seen the largest increase in its contribution to the economy?
| Stages of Production | Sales Income (₹) | Factor Cost (₹) | Increasing Value (₹) |
| Cotton | 100 | 00 | 100 |
| Yarn | 200 | 100 | 100 |
| Cloth | 280 | 200 | 80 |
| Total | 580 | 300 | 280 |