Heat shrink plastics will shrink in 1 or 2 dimensions, but expand in the 3rd (thickness). That is, the volume of the plastic material is still greater when warm than when cold, but it’s shape changes significantly.
Shrink wrap is a bit like putting a stretched rubber band in a cold freezer. The rubber band will freeze in this stretched condition and stay there until it warms up enough for the molecules to more easily change shape. Shrink wrap just operates at higher temperatures — staying “frozen” at room temperature, and taking a higher temperature to allow the molecules to move.
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