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11 March, 05:26

Assume that beef and chicken are substitutes. If the price of beef increases, all other things being equal, demand for chicken will increase. True or false?

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  1. 11 March, 07:32
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    True

    Explanation:

    This is a true statement. The beef and chicken are substitute goods. The substitute goods are generally have a positive cross price elasticity of demand which states that there is a direct relationship between the price of beef and the demand of chicken.

    If the price of beef increases then as a result the demand for chicken increases and if the price of beef decreases then as a result the demand for chicken decreases.
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