If two goods are substitute goods,
A)The percentage change in quantity demanded for good X will fall if there is a reduction in price of good Y.
B)The percentage change in quantity demanded for good X will stay the same if there is an increase in the price of good Y.
C)If the price of good X increases,the demand for good Y falls.

Question

Quizplus · Accepted Answer

If two goods are substitute goods, they can be used in place of each other. So, if the price of one substitute good (Y) falls, consumers will tend to switch to that good, and demand for the other substitute good (X) will fall. Therefore, the percentage change in quantity demanded for good X will fall if there is a reduction in price of good Y.

If Two Goods Are Substitute Goods