There are two universities, A and B, in a city. Tuition rises at University A and, as a result, the demand for attending University B rises. It follows that educational services at the two universities are
A)complements.
B)normal goods.
C)inferior goods.
D)substitutes.

Question

Quizplus · Accepted Answer

When the tuition at University A rises, it becomes more expensive for students to attend, causing the demand for attending University B to increase. This shows that the two universities are substitute goods, as students are switching from one to the other based on price changes.

There Are Two Universities, a and B, in a City