Question

Increase in the price of brand Tata tea leads to ______ in the demand for Lipton tea:

Options

• expansion in demand

• increase in demand

• decrease in demand

• contraction in demand

Answer 1

Increase in the price of brand Tata tea leads to increase in demand in the demand for Lipton tea:

Explanation:

Tata tea and Lipton tea are substitute goods. A rise in the price of Tata tea makes Lipton tea relatively more attractive, increasing its demand and shifting its demand curve to the right.