When the price of taking a ride in Uber increases,the demand for Lyft rides increases,ceteris paribus.Uber and Lyft are therefore
A)Elastic.
B)Inelastic.
C)Complements.
D)Substitutes.

Question

Quizplus · Accepted Answer

When the price of taking a ride in Uber increases, consumers will look for cheaper alternatives, which in this case, is Lyft. Hence, the demand for Lyft rides increases. This shows that Uber and Lyft are substitutes, meaning consumers can easily switch from one service to another based on price and availability.

When the Price of Taking a Ride in Uber Increases,the