A fall in price of a commodity causes movement downward along the same demand curve. This represents
Extension of demand
Economists distinguish between a movement along a demand curve and a shift of the curve. A movement along the curve is caused only by a change in the commodity’s own price, other things remaining equal; a shift is caused by changes in income, tastes or prices of related goods.
When the price falls and the consumer moves downward along the same demand curve to buy a larger quantity, this is called extension of demand (expansion in quantity demanded). The opposite movement, upward along the curve after a rise in price, is contraction of demand.
An increase in demand means the whole curve shifts to the right because of a non-price factor, so more is bought at the same price; that is not a movement along the curve. A decrease in demand is a leftward shift for non-price reasons, and a shift of the demand curve to the left is the same thing. Neither describes a downward movement along an unchanged curve.
Extension of demand option is correct.
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