Plastic and steel are substitutes in the production of body panels for certain automobiles. If the price of plastic increases, with other things remaining the same, we would expect:
A) the price of steel to fall.
B) the demand curve for steel to shift to the right.
C) the demand curve for plastic to shift to the left.
D) nothing to happen to steel because it is only a substitute for plastic.
E) the demand curve for steel to shift to the left.

Question

Quizplus · Accepted Answer

When the price of plastic increases, manufacturers may switch to using more steel as a substitute, increasing the demand for steel. This is represented by a rightward shift in the demand curve for steel.

Plastic and Steel Are Substitutes in the Production of Body