Question:medium

Ms Stuman's real income rises as a result of a fall in the price of sugar in the market. As a result, she now purchases more quantity of sugar than before. This phenomenon will be termed as:

Updated On: Apr 2, 2026
  • Increase in demand
  • Decrease in demand
  • Expansion in demand
  • Contraction in demand
Show Solution

The Correct Option is C

Solution and Explanation

The situation described is Ms. Stuman purchasing a greater quantity of sugar due to a decrease in its price. In economic terms, this is understood as follows:

When a good's price falls, consumers can acquire more of it with their existing income, thus enhancing their real purchasing power for that specific good. Consequently, the lower sugar prices enable Ms. Stuman to buy more sugar, signifying a modification in the quantity demanded directly attributable to the price reduction.

This rise in quantity demanded, triggered by a price decrease, is termed an expansion in demand. It is crucial to distinguish this from an "increase in demand," which is driven by factors external to price, such as shifts in consumer tastes or income levels.

Thus, the precise economic term for this occurrence is: Expansion in demand

Was this answer helpful?
0