Explanation:

When the load power factor increases, the kVA demand decreases while keeping the kW demand constant. The explanation for this is as follows:

1. Understanding Power Factor:
Power factor is the ratio of real power (kW) to apparent power (kVA) in an electrical system. It represents the efficiency or effectiveness of power utilization. A power factor of 1 indicates a purely resistive load, while a power factor less than 1 indicates a load with reactive components.

2. Relationship between kVA and kW:
The relationship between kVA, kW, and power factor is given by the formula:
kVA = kW / Power Factor

This means that the kVA demand is directly proportional to the kW demand and inversely proportional to the power factor.

3. Impact of Load Power Factor on kVA Demand:
When the load power factor increases, it means the load becomes more resistive and less reactive. As a result, the apparent power (kVA) required to meet the load demand decreases.

When the power factor increases, the kVA demand decreases due to the following reasons:
- A higher power factor implies a lower proportion of reactive power, which reduces the overall kVA demand.
- The increase in power factor indicates a more efficient utilization of electrical power, resulting in a reduced kVA requirement.

Therefore, keeping the kW demand constant, if the load power factor increases, the kVA demand decreases. This is because a higher power factor signifies a more resistive load with less reactive power consumption, leading to a decreased overall apparent power requirement.

Conclusion:
Hence, the correct answer is option 'C' - the kVA demand decreases when the load power factor increases while keeping the kW demand constant.