Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for corn will increase as consumers seek alternatives.
B
Demand for corn will decrease since potatoes are now more expensive.
C
Demand for corn will remain unchanged since they are not directly related.
D
Demand for corn will increase only if its price decreases.
Understanding the Answer
Let's break down why this is correct
Answer
When the price of potatoes goes up a lot, people often look for other options to buy instead of potatoes. Corn is a substitute good, which means that if potatoes are too expensive, more people will choose to buy corn instead. This increased demand for corn will likely cause its price to rise as well because more customers want it. For example, if potatoes are usually $2 a pound and suddenly increase to $4, shoppers might buy corn instead, which could then increase its price from $1. 50 to $2.
Detailed Explanation
When potatoes cost more, people look for cheaper options. Other options are incorrect because This answer suggests that higher potato prices would make corn less popular; This answer thinks that corn and potatoes don't affect each other.
Key Concepts
Substitutes in Economics
Consumer Behavior
Market Dynamics
Topic
Substitutes and Complements in Economics
Difficulty
medium level question
Cognitive Level
understand
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