do you agree with the view that the market absorbs the impact of increase or decrease in demand only through the process of extension and contraction of demand and supply?? give reasons

No, contraction and extension of demand and supply are the result of increase or decrease in quantity demanded due to changes in the price of the commodity. But there are many factors other than price which result in an increase and decrease in demand and supply. For example, demand of a commodity is influences by price of related goods, tastes & preferences of consumer etc.

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