What is the effect on product A of an increase in the price of substitute product B?
A)It will cause an increase in the quantity demanded.
B)It will cause an increase in demand.
C)It will cause a decrease in demand.
D)It will cause an increase in supply.
E)It will cause a decrease in supply.

Question

Quizplus · Accepted Answer

When the price of a substitute product (B) increases, consumers are likely to switch their preference to product A, leading to an increase in demand for product A. This is because the two products are seen as interchangeable to some extent, and a higher price for product B makes product A more attractive by comparison.

What Is the Effect on Product a of an Increase