Advertisements
Advertisements
Question
If due to fall in the price of good X, demand for good Y also falls, then the two goods are ______.
Options
Substitutes
Complements
Not related
Competitive
MCQ
Fill in the Blanks
Advertisements
Solution
If due to fall in the price of good X, demand for good Y also falls, then the two goods are Substitutes.
Explanation:
A fall in X’s price reduces demand for Y when X and Y are substitutes, because consumers switch toward the cheaper X. For complements, a fall in one’s price would tend to raise demand for the other.
shaalaa.com
Is there an error in this question or solution?
