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

Expansion in demand

The correct answer is Option (3) → Expansion in demand

Expansion in demand refers to the increase in the quantity demanded of a good due to a decrease in its price, leading to an increase in the consumer's real income or purchasing power. In this case, Ms. Suman's real income rises because the price of sugar falls, prompting her to buy more sugar than before.

The other options are defined as follows:

• Increase in demand: This typically refers to a shift of the demand curve to the right due to factors other than price, such as an increase in income or preferences.
• Decrease in demand: This refers to a shift of the demand curve to the left due to factors other than price.
• Contraction in demand: This refers to a decrease in the quantity demanded of a good due to an increase in its price, while all other factors remain constant.