Goods X and Y are substitute goods. If the demand for good X increases, the price of good X will _____ and cause a(n) _____ in the demand for good Y. The _____ price for good Y will further _____ the demand for good X, while the _____ price for good X will further _____ the demand for good Y.

Question

Quizplus · Accepted Answer

When the demand for good X increases, its price will increase, leading to an increase in the demand for good Y (since they are substitutes). The higher price for good Y will further increase the demand for good X, while the higher price for good X will further decrease the demand for good Y.

Goods X and Y Are Substitute Goods