Consider the following statements: ​ Other things remaining unchanged, market demand for a good might increase if ​ 1. Price of its substitute increase ​ 2. Price of its complement increase ​ 3. The good is an inferior good and income of the consumers increases ​ 4. Its price falls ​ Which of the above statements are correct? ​

Statement 1 is correct. If the price of a substitute rises, consumers switch to this good, so its demand shifts to the right. Statement 2 is wrong. A rise in the price of a complement makes the joint bundle costlier, so demand for this good falls. Statement 3 is wrong. For an inferior good, a rise in income reduces demand, as consumers move up to superior goods. Statement 4 is the technical trap. A fall in own price raises quantity demanded along the same demand curve, which is a movement along the curve, not a shift. The question and the UPSC key use 'demand' loosely here, so the intended answer is 1 and 4 only, which is option A.

Core concept: determinants of demand (shift factors: substitutes, complements, income, consumer preferences) versus the law of demand (own-price effect). This is basic microeconomics that the Prelims economy section builds on, and it connects to Mains questions on how price signals and substitution shape market behaviour, for example in food inflation or subsidy design.

Trap: aspirants mark statement 4 as wrong because they know a price fall changes quantity demanded, not demand. Read the question's intent and the key, and keep the distinction clear in your mind for other questions.