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Aspirin: Gasoline Vs. Electric Automobiles

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The aspirin example shows what happens to the demand for good B when the price of good A increases. Manufacturer A's price having increased, demand for its aspirin product (for which there are many substitute goods) decreases.

Since aspirin is so widely available, there probably won't be a great increase in each of these many other brands; however in instances where there are only a few substitutes, or perhaps only one, the demand increase may be marked.

Gasoline vs. electric automobiles are an interesting instance of this. In practice, there really are only a few automobile alternatives: gasoline automobiles, diesels and electrics. Gasoline and diesel prices, as you'll remember, have been extremely volatile since the late 1980s. As U.S.
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