An economist notes that demand for Brand A increases when the price of Brand B decreases. We can say that Brand A and Brand B are substitute goods Brand A is an inferior good, while Brand B is a superior good Both Brand A and Brand B are normal goods Brand A and Brand B are complementary goods Brand A is a superior good while Brand B is an inferior good

Q: Use the following theories to explain the law of demand: (I) Income effect (II)Substitution effect

A: The law of demand states that all the other things remaining constant, a higher price leads to a…

Q: If we have two substitute goods, then a decrease in the price of one will lead to increase in the…

A: In a market, two goods can be related to each other in terms of their demand, such that a change in…

Q: Which of the following pairs of goods are most likely substitutes? a. Cola and lemon lime soda b.…

A: The notion that one good may be substituted for another has obvious economic implications: insofar…

Q: each locus on the demand curve reflects

A: Demand is defined as an economic term that refers to a customer's ability to purchase goods and…

Q: According to a recent study, "Stricter college alcohol policies, such as raising the price of…

A: A complementary good or service is an item used in conjunction with another good or service.…

Q: An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes…

A: Normal goods are goods with positive income elasticity of demand. This means that a rise in income…

Q: when the demand for one commodity falls due to the fall in the price of the other good, the two…

A: # We know we have two combination of goods available which are complements and substitutes.…

Q: Two goods are said to be substitutes if an increase in income results in a decrease in demand. True…

A: A normal good is one whose consumption increases when income increases. The demand curve for a…

Q: How do changes in income affect the demand for a good? Also show your answer with a graph.

A: A consumer's desire to buy goods and services, as well as their readiness to pay a price for such…

Q: If the percentage decline in quantity is greater than the percentage increase in price, what will be…

A: # For elastic Demand, elasticity of demand is greater than 1 and for inelastic demand the Elasticity…

Q: The first law of demand implies that when the price of good X increases the result will be…

A: The demand theory in the Microeconomics is part of the consumer theory. The consumer theory in the…

Q: If both coffee and tea are normal goods and the price of coffee increases, it will increase the…

A: In case of normal goods, the law of demand applies which states that as price of the given good…

Q: Do you agree or disagree with each of the following statements? Briefly explain your answers and…

A: (a) The price of coffee rises, hence the demand for coffee falls. If the demand for sugar falls…

Q: If Goods A & B are complements, and increase in the price of Good B will:

A: Goods are complements means that two goods are used together in some specified proportions like like…

Q: 1. The movement from point A to point B on the graph is caused by   a.  an increase in price.   b.…

A: Demand is made of different combinations of price and quantity demanded.

Q: Which of the following is NOT a characteristic of Giffen goods? a. The goods have no close…

A: A Giffen good is a special type of good because it does not follow the law of demand condition when…

Q: If the quantity demanded of good X decreases, then: *

A: A consumer's desire to buy products and services, as well as their willingness to pay a price for…

Q: why does a substitution between goods cause a negative slope on a demand curve?

A: The demand curve is a graphical representation of the demand schedule which indicates the different…

Q: If two goods were perfect substitutes of each other, it necessarily follows that

A: To find : what happens when two goods are perfect substitutes.

Q: The law of demand states that, ceteris paribus, there is an inverse relationship between the price…

A: The demand curve shows the association between the amounts of commodity demanded by the consumer at…

Q: If new substitutes are developed for a product, what will likely happen to the demand curve for that…

A: The price elasticity of demand measures the responsiveness of the quantity demanded of a good or…

Q: Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B…

A: Substitute goods are those goods that can be consumed by an individual in place of each other by the…

Q: Do you agree or disagree with each of the following statements? Briefly explain your answers and…

A: The equilibrium price is where demand is equal to supply.

Q: What is the difference between an individual demand curve and a market demand curve? If the price of…

A: We are authorized to answer one question at a time, since you have not mentioned which question you…

Q: What happens to demand for normal goods when there is rise in price of substitute goods

A: A normal good is also known as a necessity good. These are the goods that have higher demand when…

Q: If goods X and Y are substitute goods, then an increase in the price of Y, other things constant, O…

A: In a market, when two goods are substitutes, they both can be exchanged for each other as they are…

Q: A good with many close substitutes is likely to have relatively demand, since consumers can easily…

A: Price elasticity of demand The Price elasticity of demand is the reaction of demand due to change in…

Q: Is the following true: ‘the market demand function of a good will only be upward sloping if the good…

A: There are different types of goods sold on the consumer market. These goods include normal goods,…

Q: Identify the two goods which are substitutes.     Good X and Good Y     It is not possible to…

A: Here, as the demand for good X decreases, the demand for good Y increases. Therefore, these are…

Q: Suppose that you discover that, ceteris paribus, when the price of tomatoes increases, the demand…

A: Complementary goods - goods which are used together i.e. shocks right and left mobile and sim…

Q: The Law of Supply states that:   Question 2 options: a all other factors fixed, a greater quantity…

A: The total quantity of goods and services available in the market for purchase at a particular price…

Q: According to the law of demand, when the price of an item goes up, the quantity demanded stays at…

A: In a competitive market structure, the market forces of demand and supply determine the equilibrium…

Q: Do you agree or disagree with each of the following statements? Briefly explain your answers and…

A: Demand curve reflects the quantity demanded of a good with respect to a given price. An increase in…

Q: Examine the following pair of goods and determine which pair is an example for complementary goods?…

A: A complementary good is defined as a good that is used in conjunction with another good.  These…

Q: What is the difference between substitutes and complements? Indicate two goods that are substitutes…

A: Two goods are said to be substitutes of each other if they can be easily replaced with each other.…

Q: Based on the diagram, are beer and pretzels complements or substitutes?

A: Complementary commodities are those commodities which are used together. When the price of one good…

Q: If the supply curve for aspirin is perfectly elastic, then a reduction in demand will cause the…

A: The markets have two sides, the demand side, where the buyers, and consumers operate, and the other…

Q: Good B and Good A are substitutes. If the price of Good A rises, what will happen to the demand…

A: Good B and Good A are substitutes. If the price of Good A rises, consumers substitute good B for…

Q: Explain how each of the following factors can cause demand to shift either to the left or to the…

A: The quantity of an item that consumers are willing and able to consume at various prices over a set…

Q: The law of demand states that as product’s price increases, its quantity demanded decreases,…

A: The ceteris paribus condition states that all other independent variable s in the model has to keep…

Q: In Mexico, NAFTA had the result of lowering the price of used cars. Consider the effect of the…

A: When the price of used cars in Mexico fell the Mexican demand for new cars decrease. This would…

Q: If two goods are substitutes, a decline in the price of one will cause an increase in the demand for…

A: There are different types of goods based on their use, consumer preference & taste, and…