📚 Learning Guide
Understanding Demand and Supply
easy

In a market, when the price of a substitute good increases, the demand for the original good tends to __________.

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
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3
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4
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Choose the Best Answer

A

decrease

B

increase

C

remain unchanged

D

become elastic

Understanding the Answer

Let's break down why this is correct

Answer

When the price of a substitute good increases, the demand for the original good tends to rise. This happens because people look for alternatives when prices go up. For example, if the price of butter increases, many people might start buying more margarine instead, which is a substitute for butter. As more people choose margarine, the demand for it goes up because it's seen as a cheaper option. Therefore, a change in the price of a substitute can directly affect how much of the original good people want to buy.

Detailed Explanation

When the price of a substitute goes up, people look for cheaper options. Other options are incorrect because Some might think that higher prices lead to less demand; It's a common mistake to think demand stays the same.

Key Concepts

Demand
Substitute Goods
Market Equilibrium
Topic

Understanding Demand and Supply

Difficulty

easy level question

Cognitive Level

understand

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