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18 March, 13:53

Good X and good Y are substitutes. If the price of good Y increases, then the

A. quantity demanded of good X will increase

B. demand for good X will increase

C. demand for good X will decrease

D. quantity demanded of good X will decrease

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Answers (1)
  1. 18 March, 15:30
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    The correct answer is B. demand for good X will increase.

    Explanation:

    Two goods, X and Y, are said to be substitutes if they can be used to serve the same purpose. Thus, if good X is a substitute to good Y, then X can be used in place of Y and Y can be used in place of X.

    For substitute goods, the cross-price elasticity of demand is positive. This means that if the price of one good rises, the demand for the substitute good increases.
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Home » Business » Good X and good Y are substitutes. If the price of good Y increases, then the A. quantity demanded of good X will increase B. demand for good X will increase C. demand for good X will decrease D. quantity demanded of good X will decrease
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