Solved UPSC CDS/OTA Question
A solved UPSC CDS/OTA PYQ — decoded step-by-step.
Solve it the standard way once — then learn the shortcut.
Consider the following statements regarding the Law of Demand: 1. It states that other things remain constant, demand increases as price increases. 2. The law is represented by a downward-sloping demand curve. 3. Exceptions to the law include Giffen goods and Veblen goods. Which of the above statements is/are correct?
Step-by-Step Solution
The complete worked solution.
Every step explained — no skipped algebra.
Statement 1 is incorrect. The Law of Demand states that demand falls when price rises (inverse relationship). Statement 2 is correct as the demand curve slopes downward. Statement 3 is correct as exceptions include Giffen goods (inferior goods with a positive price-demand relationship) and Veblen goods (luxury goods).