Question

Mr Krishnan purchases 1 litre of milk per day when it is priced at ₹ 35 per litre. On arrival of his guests he purchases 8 litres of milk. Choose the correct impact in demand.

Options

• Increase in demand

• Increase in quantity demanded

• Decrease in demand

• Decrease in country demanded

Answer 1

Increase in demand

Explanation:

An increase in demand happens when the quantity purchased increases owing to non-price causes while the market price remains constant. In this situation, the price of milk remains constant at ₹ 35. However, Mr. Krishnan purchases additional milk due to an external factor: the coming of guests. Because this shift is caused by a change in situational demands rather than a price decrease, it is a true “increase in demand” rather than an increase in quantity demanded.