Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in Demand
B
Decrease in Demand
C
No Change in Demand
D
Increase in Supply
Understanding the Answer
Let's break down why this is correct
Answer
When the price of a substitute good increases, people tend to buy more of the original good because it becomes relatively cheaper. For example, if the price of butter goes up, people might buy more margarine instead. On the other hand, when we think about complements, which are goods that are used together, an increase in the price of one will likely lead to a decrease in the demand for the other. So, if the price of printers goes up, people might buy fewer ink cartridges because they are less likely to buy a printer at that higher price. This relationship shows how the demand for complements and substitutes reacts differently to price changes.
Detailed Explanation
When the price of a complement goes up, people buy less of it. Other options are incorrect because Some might think that if one product's price goes up, people will buy more of its complement; It's easy to think that price changes don't affect demand.
Key Concepts
Cross Price Elasticity of Demand
Substitutes and Complements
Consumer Behavior
Topic
Cross Price Elasticity of Demand
Difficulty
easy level question
Cognitive Level
understand
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