If good x₁is a substitute for good x₂, then an increase in the price of x₂causes the demand of x₁to: A)be indeterminate. B)increase. C)decrease. D)remain unchanged.

Question

Quizplus · Accepted Answer

When the price of a good (good 2) increases and it is a substitute for another good (good 1), the demand for the substitute good (good 1) increases as consumers switch to the more affordable option.

If Good X1 is a Substitute for Good X2, Then

If Good X₁is a Substitute for Good X₂, Then