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

A reduction in the price of oranges, which are substitutes for apples, will lead to a decrease in the demand for apples as consumers switch to the cheaper substitute. This decrease in demand for apples will tend to decrease their price.

Assume That Apples and Oranges Are Substitute Goods