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UPSC 2021: 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?
(a)1 and 4 only
(b)2,3 and 4
(c)1, 3 and 4
(d)1,2 and3
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Not attemptedCorrect Answer: (a) 1 and 4 only
Demand for a good rises when the price of its substitute increases (cross-price effect) and when the good’s own price falls. A rise in the price of a complement lowers demand, and for an inferior good, higher consumer income reduces demand. Thus only statements 1 and 4 are correct ⇒ option (a). ([britannica.com](https://www.britannica.com/money/demand-curve?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2021 Indian Economy question?▼
The correct answer is option (a): 1 and 4 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this National Income & Economic Growth question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2021, GS Paper 1, as Question 4. It falls under Indian Economy > National Income & Economic Growth.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from National Income & Economic Growth?▼
UPSC has asked 37 questions from National Income & Economic Growth (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.