There is an anticipation that India and Pakistan border tensions over Jammu and Kashmir would rise in future and a war is foreseen. What changes will you see in the demand of oil? |
Extension in demand Contraction in demand Increase in demand Decrease in demand |
Increase in demand |
Changes in the demand of a commodity can be categorised into 2 categories:
Now, as the change in demand of oil is due to "War", which is a factor other than the price, that means, there will be an increase in demand of oil. Had it been a situation where the demand had risen due to fall in price, we would have called it extension of demand. |