The formation of cavities (or bubbles) is induced by flow separation, or non-uniform flow velocities, inside a pump casing. In centrifugal pumps the eye of the pump impeller is smaller than the flow area of pipe. This decrease in flow area of pump results in increase in flow rate. So pressure drop happened between pump suction and the vanes of the impeller. Here air bubbles or cavities are formed because of liquid vapour due to increase in temperature in impeller. This air bubbles are transmitted to pump which forms cavitation.
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