As a result of a decrease in the price of a substitute for your firm's product, you should anticipate a ________price for your product than the current equilibrium price and a________ equilibrium quantity than the current equilibrium quantity.

Question

Quizplus · Accepted Answer

A decrease in the price of a substitute makes the substitute more attractive to consumers, leading to a decrease in demand for your product. This results in a lower equilibrium price and a lower equilibrium quantity for your product.

As a Result of a Decrease in the Price of a Substitute