Substitute goods increase pasta demand Steps:

• Rice scare reduces rice demand as consumers avoid it due to health or shortage fears.
• Rice and pasta serve as substitutes in basic food consumption.
• Consumers switch spending to pasta, shifting pasta demand curve rightward.
• Higher pasta price prompts more pasta production, extending supply along the curve.

Why C is correct:

• Decrease in demand for one substitute shifts demand right for the other (positive cross-price elasticity); rising price extends supply per law of supply.

Why the others are wrong:

• A: Supply contracts (less quantity) only if price falls; here price rises, extending supply.
• B: Demand contracts (less quantity demanded) if price rises without shift; here demand shifts right first.
• D: Demand extends (more quantity along curve) from price fall; here demand shifts from substitution.

Final answer: C