When an increase in the price of one good lowers the price of another good, the two goods are called substitutes.

Question

Quizplus · Accepted Answer

When the price of one good increases, it usually results in an increase in demand for substitute goods, which leads to an increase in their price as well. Therefore, when the price of one good rises, it does not cause a decrease in the price of another good, making the statement false.

When an Increase in the Price of One Good Lowers