Market Equilibrium and Shifts in Demand and Supply
-For two goods,X and Y,to be classified as substitutes,it must be the case that
A) X and Y are identical.
B) consumers tend to purchase both items.
C) when the price of X rises,the demand for Y decreases.
D) when the price of X rises,the demand for Y increases.
E) X and Y look alike.

Question

Market Equilibrium and Shifts in Demand and Supply 
-For two goods,X and Y,to be classified as substitutes,it must be the case that
A) X and Y are identical. 
B) consumers tend to purchase both items. 
C) when the price of X rises,the demand for Y decreases. 
D) when the price of X rises,the demand for Y increases. 
E) X and Y look alike.

Quizplus · Accepted Answer

Substitute goods are those where an increase in the price of one leads to an increase in the demand for the other, as consumers switch to the cheaper alternative.