How is a contraction in demand represented on the demand curve?

Study for the GCSE Economics Exam with comprehensive flashcards and multiple choice questions. Each question includes hints and detailed explanations. Prepare thoroughly for your exam!

A contraction in demand is represented by a movement along the demand curve rather than a shift of the entire curve. More specifically, it signifies a decrease in the quantity demanded at a specific price level, typically indicated by a downward movement along the curve.

When the price of a good rises, consumers tend to purchase less of that good, leading to this downward movement to a lower quantity demanded. This contrasts with a shift in the demand curve, which would signify a change in demand due to factors other than price, such as changes in consumer income or preferences. Thus, a downward movement captures the essence of a contraction in demand as a response to an increase in price while keeping other factors constant.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy