Difference between Expansion in Demand and Increase in Demand

Expansion in Demand

When there is an increase in the quantity demanded of a commodity because of a fall in its price by keeping other factors constant, it is known as an Expansion in Demand. In simple terms, the demand for a commodity rise because of a fall in its price. Expansion in demand results in a downward movement along the same demand curve.

Example:

Increase in Demand

When there is an increase in the quantity demanded of a commodity because of any factor other than the price of the commodity, it is known as an Increase in Demand. In simple terms, the demand for a commodity increases at the same price, because of changes in other factors. Increase in demand results in a rightward shift in the demand curve.

Example:

Difference between Expansion in Demand and Increase in Demand

Basis	Expansion in Demand	Increase in Demand
Meaning	An increase in the quantity demanded of a commodity because of a fall in its price, keeping other factors constant is known as Expansion in Demand.	An increase in the quantity demanded of a commodity because of any factor other than the price of the commodity is known as Increase in Demand.
Effect on Demand Curve	The effect of expansion in demand is a downward movement along the same demand curve.	The effect of increase in demand is a rightward shift in the demand curve.
Price Effect	There is negative price effect; i.e., the demand for a commodity increases when its price falls.	There is no price effect; i.e., the demand for a commodity increases at the same price.
Reason	The demand for a commodity expands because of a reduction in its price.	The demand for a commodity increases because of a favourable change in other factors such as decrease in the price of complementary goods, increase in the price of substitutes, etc.
Example	If the  demand for a commodity X rises from 200 units to 270 units because of a fall in its price from ₹15 to ₹10, then it is a case of Expansion in Demand.	If the demand for a commodity X rises from 200 units to 270 units with constant price of ₹15 because of changes in other factors like increase in the price of the substitute good, then it is a case of Increase in Demand.

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