UPSC PRELIMS · ECONOMICS · DEMAND AND ELASTICITY
Consider the following statements: Other things remaining unchanged, market demand for a good might increase if 1. price of its substitute increases 2. price of its complement increases 3. the good is an inferior good and income of the consumers increases 4. its price falls Which of the above statements are correct?
Take a breath. Choose one. Press A–D on your keyboard if you like.
EXPLANATION
Demand can increase when the price of a substitute rises and when the good's own price falls; the other two statements do not increase demand as stated.
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