Assume that apples and oranges are substitute goods.Given the initial supply and demand curves for apples,a reduction in the price of oranges will tend to

Question

Quizplus · Accepted Answer

Since apples and oranges are substitute goods, a reduction in the price of oranges makes oranges more attractive relative to apples, leading to a decrease in the demand for apples. This decreased demand for apples, with supply remaining constant, tends to decrease the price of apples.

Assume That Apples and Oranges Are Substitute Goods