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3 July, 13:44

If goods A and B are substitutes, a decrease in the price of good B will:

increase the demand for good B.

increase the demand for good B and decrease the demand for good A.

increase the demand for good A.

decrease the demand for good A.

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Answers (1)
  1. 3 July, 16:51
    0
    decrease the demand for good A.

    Explanation:

    Under the cross price elasticity of demand, there are two goods i. e substitute goods and the complementary goods.

    The substitute goods shows the positive relation between the price of good B and the demand of good A. That means if the price of good B decreases. then the demand of good A is decreases and vice versa

    Whereas, in the case of complimentary goods, it shows a negative relation between the price of good B and the demand of good A. That means if the price of good B decreases. then the demand of good A is increases and vice versa
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Home » Business » If goods A and B are substitutes, a decrease in the price of good B will: increase the demand for good B. increase the demand for good B and decrease the demand for good A. increase the demand for good A. decrease the demand for good A.
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