Asked by
Stefanic Livinalli
on Dec 11, 2024
Verified
Two goods are considered substitutes if
A) a decrease in the demand for one leads to a decrease in the supply of the other.
B) an increase in the demand for one leads to a decrease in the supply of the other.
C) an increase in the price of one leads to an increase in the demand for the other.
D) a decrease in the price of one leads to an increase in the demand for the other.
E) a decrease in the supply of one leads producers to switch to production of the other.
Substitutes
Products or services that serve as alternatives to each other, where a rise in the price of one results in a higher demand for its counterpart.
- Understand the implications of substitute and complementary goods on market dynamics.
Verified Answer
GP
Learning Objectives
- Understand the implications of substitute and complementary goods on market dynamics.