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Question
If price of x increases, the demand for y too increases. How are x and y related?
Options
as complementary goods
as inferior goods
as substitute goods
as unrelated goods
MCQ
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Solution
as substitute goods
Explanation:
When two goods are substitutes, one can be used in place of the other. For example, tea and coffee are substitute goods. If the price of tea (x) increases, consumers may buy more coffee (y) instead, as coffee becomes relatively cheaper.
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