{"id":91852,"date":"2025-06-01T11:07:51","date_gmt":"2025-06-01T11:07:51","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=91852"},"modified":"2025-06-01T11:07:51","modified_gmt":"2025-06-01T11:07:51","slug":"consider-the-following-statementsother-things-remaining-unchanged-m","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/","title":{"rendered":"Consider the following statements:\nOther things remaining unchanged, m"},"content":{"rendered":"<p>Consider the following statements:<br \/>\nOther things remaining unchanged, market demand for a good might increase if<\/p>\n<ul>\n<li>price of its substitute increases<\/li>\n<li>price of its complement increases<\/li>\n<li>the good is an inferior good and income of the consumers increases<\/li>\n<li>its price falls<\/li>\n<\/ul>\n<p>Which of the above statements are correct?<\/p>\n<p>[amp_mcq option1=&#8221;1 and 4 only&#8221; option2=&#8221;2, 3 and 4&#8243; option3=&#8221;1, 3 and 4&#8243; option4=&#8221;1, 2 and 3&#8243; correct=&#8221;option1&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2021<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2021.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2021\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nThe correct option is A. Market demand for a good might increase if the price of its substitute increases or if its own price falls.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\n&#8211; 1. Price of its substitute increases: If the price of a substitute good (e.g., tea vs. coffee) increases, consumers will switch from the substitute to the original good (coffee), increasing the demand for the original good at every price. This causes a rightward shift in the demand curve. Statement 1 is correct.<br \/>\n&#8211; 2. Price of its complement increases: If the price of a complementary good (e.g., cars vs. petrol) increases, the total cost of consuming the bundle increases. This typically leads to a decrease in demand for both the complement and the original good (cars). This causes a leftward shift in the demand curve. Statement 2 is incorrect.<br \/>\n&#8211; 3. The good is an inferior good and income of the consumers increases: For an inferior good (e.g., cheap noodles), as consumer income increases, demand for that good decreases (consumers switch to normal goods). This causes a leftward shift in the demand curve. Statement 3 is incorrect.<br \/>\n&#8211; 4. Its price falls: According to the law of demand, if the price of a good falls, the quantity demanded increases. While this is technically a movement *along* the demand curve (not a shift of the curve which is typically meant by &#8220;increase in market demand&#8221;), in the context of competitive multiple-choice questions, &#8220;market demand&#8230; increase&#8221; is sometimes used more broadly to include factors that lead to more of the good being bought, which includes a price reduction. Given the options, this interpretation is likely intended. Statement 4 leads to an increase in the quantity demanded.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nFactors causing a rightward shift in the demand curve (increase in demand) include increased price of substitutes, decreased price of complements, increase in consumer income (for normal goods), decrease in consumer income (for inferior goods), change in tastes favouring the good, increase in population, expectations of future price increases. A fall in the good&#8217;s own price increases the quantity demanded, representing a movement along the existing demand curve. However, option A which includes 1 and 4 is the only combination where both factors lead to more of the good being demanded\/bought.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Consider the following statements: Other things remaining unchanged, market demand for a good might increase if price of its substitute increases price of its complement increases the good is an inferior good and income of the consumers increases its price falls Which of the above statements are correct? [amp_mcq option1=&#8221;1 and 4 only&#8221; option2=&#8221;2, 3 &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Consider the following statements:\nOther things remaining unchanged, m\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/#more-91852\">Detailed Solution<span class=\"screen-reader-text\">Consider the following statements:<br \/>\nOther things remaining unchanged, m<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1110,1120,1261],"class_list":["post-91852","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1110","tag-economic-development","tag-nature-of-indian-economy","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Consider the following statements: Other things remaining unchanged, m<\/title>\n<meta name=\"description\" content=\"The correct option is A. Market demand for a good might increase if the price of its substitute increases or if its own price falls. - 1. Price of its substitute increases: If the price of a substitute good (e.g., tea vs. coffee) increases, consumers will switch from the substitute to the original good (coffee), increasing the demand for the original good at every price. This causes a rightward shift in the demand curve. Statement 1 is correct. - 2. Price of its complement increases: If the price of a complementary good (e.g., cars vs. petrol) increases, the total cost of consuming the bundle increases. This typically leads to a decrease in demand for both the complement and the original good (cars). This causes a leftward shift in the demand curve. Statement 2 is incorrect. - 3. The good is an inferior good and income of the consumers increases: For an inferior good (e.g., cheap noodles), as consumer income increases, demand for that good decreases (consumers switch to normal goods). This causes a leftward shift in the demand curve. Statement 3 is incorrect. - 4. Its price falls: According to the law of demand, if the price of a good falls, the quantity demanded increases. While this is technically a movement *along* the demand curve (not a shift of the curve which is typically meant by &quot;increase in market demand&quot;), in the context of competitive multiple-choice questions, &quot;market demand... increase&quot; is sometimes used more broadly to include factors that lead to more of the good being bought, which includes a price reduction. Given the options, this interpretation is likely intended. Statement 4 leads to an increase in the quantity demanded.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consider the following statements: Other things remaining unchanged, m\" \/>\n<meta property=\"og:description\" content=\"The correct option is A. Market demand for a good might increase if the price of its substitute increases or if its own price falls. - 1. Price of its substitute increases: If the price of a substitute good (e.g., tea vs. coffee) increases, consumers will switch from the substitute to the original good (coffee), increasing the demand for the original good at every price. This causes a rightward shift in the demand curve. Statement 1 is correct. - 2. Price of its complement increases: If the price of a complementary good (e.g., cars vs. petrol) increases, the total cost of consuming the bundle increases. This typically leads to a decrease in demand for both the complement and the original good (cars). This causes a leftward shift in the demand curve. Statement 2 is incorrect. - 3. The good is an inferior good and income of the consumers increases: For an inferior good (e.g., cheap noodles), as consumer income increases, demand for that good decreases (consumers switch to normal goods). This causes a leftward shift in the demand curve. Statement 3 is incorrect. - 4. Its price falls: According to the law of demand, if the price of a good falls, the quantity demanded increases. While this is technically a movement *along* the demand curve (not a shift of the curve which is typically meant by &quot;increase in market demand&quot;), in the context of competitive multiple-choice questions, &quot;market demand... increase&quot; is sometimes used more broadly to include factors that lead to more of the good being bought, which includes a price reduction. Given the options, this interpretation is likely intended. Statement 4 leads to an increase in the quantity demanded.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T11:07:51+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Consider the following statements: Other things remaining unchanged, m","description":"The correct option is A. Market demand for a good might increase if the price of its substitute increases or if its own price falls. - 1. Price of its substitute increases: If the price of a substitute good (e.g., tea vs. coffee) increases, consumers will switch from the substitute to the original good (coffee), increasing the demand for the original good at every price. This causes a rightward shift in the demand curve. Statement 1 is correct. - 2. Price of its complement increases: If the price of a complementary good (e.g., cars vs. petrol) increases, the total cost of consuming the bundle increases. This typically leads to a decrease in demand for both the complement and the original good (cars). This causes a leftward shift in the demand curve. Statement 2 is incorrect. - 3. The good is an inferior good and income of the consumers increases: For an inferior good (e.g., cheap noodles), as consumer income increases, demand for that good decreases (consumers switch to normal goods). This causes a leftward shift in the demand curve. Statement 3 is incorrect. - 4. Its price falls: According to the law of demand, if the price of a good falls, the quantity demanded increases. While this is technically a movement *along* the demand curve (not a shift of the curve which is typically meant by \"increase in market demand\"), in the context of competitive multiple-choice questions, \"market demand... increase\" is sometimes used more broadly to include factors that lead to more of the good being bought, which includes a price reduction. Given the options, this interpretation is likely intended. Statement 4 leads to an increase in the quantity demanded.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/","og_locale":"en_US","og_type":"article","og_title":"Consider the following statements: Other things remaining unchanged, m","og_description":"The correct option is A. Market demand for a good might increase if the price of its substitute increases or if its own price falls. - 1. Price of its substitute increases: If the price of a substitute good (e.g., tea vs. coffee) increases, consumers will switch from the substitute to the original good (coffee), increasing the demand for the original good at every price. This causes a rightward shift in the demand curve. Statement 1 is correct. - 2. Price of its complement increases: If the price of a complementary good (e.g., cars vs. petrol) increases, the total cost of consuming the bundle increases. This typically leads to a decrease in demand for both the complement and the original good (cars). This causes a leftward shift in the demand curve. Statement 2 is incorrect. - 3. The good is an inferior good and income of the consumers increases: For an inferior good (e.g., cheap noodles), as consumer income increases, demand for that good decreases (consumers switch to normal goods). This causes a leftward shift in the demand curve. Statement 3 is incorrect. - 4. Its price falls: According to the law of demand, if the price of a good falls, the quantity demanded increases. While this is technically a movement *along* the demand curve (not a shift of the curve which is typically meant by \"increase in market demand\"), in the context of competitive multiple-choice questions, \"market demand... increase\" is sometimes used more broadly to include factors that lead to more of the good being bought, which includes a price reduction. Given the options, this interpretation is likely intended. Statement 4 leads to an increase in the quantity demanded.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:07:51+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/","url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/","name":"Consider the following statements: Other things remaining unchanged, m","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:07:51+00:00","dateModified":"2025-06-01T11:07:51+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The correct option is A. Market demand for a good might increase if the price of its substitute increases or if its own price falls. - 1. Price of its substitute increases: If the price of a substitute good (e.g., tea vs. coffee) increases, consumers will switch from the substitute to the original good (coffee), increasing the demand for the original good at every price. This causes a rightward shift in the demand curve. Statement 1 is correct. - 2. Price of its complement increases: If the price of a complementary good (e.g., cars vs. petrol) increases, the total cost of consuming the bundle increases. This typically leads to a decrease in demand for both the complement and the original good (cars). This causes a leftward shift in the demand curve. Statement 2 is incorrect. - 3. The good is an inferior good and income of the consumers increases: For an inferior good (e.g., cheap noodles), as consumer income increases, demand for that good decreases (consumers switch to normal goods). This causes a leftward shift in the demand curve. Statement 3 is incorrect. - 4. Its price falls: According to the law of demand, if the price of a good falls, the quantity demanded increases. While this is technically a movement *along* the demand curve (not a shift of the curve which is typically meant by \"increase in market demand\"), in the context of competitive multiple-choice questions, \"market demand... increase\" is sometimes used more broadly to include factors that lead to more of the good being bought, which includes a price reduction. Given the options, this interpretation is likely intended. Statement 4 leads to an increase in the quantity demanded.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statementsother-things-remaining-unchanged-m\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"Consider the following statements: Other things remaining unchanged, m"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91852","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=91852"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91852\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=91852"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=91852"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=91852"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}