Which of the following statements represents a correct and sequentially accurate economic explanation?
A) Goods X and Y are substitutes.The price of X falls,the quantity demanded of X rises,and the demand for Y rises.
B) Goods X and Y are substitutes.The price of X rises,the demand for X falls,and the demand for Y rises.
C) Goods X and Y are substitutes.The price of X falls,the demand for X rises,and the quantity demanded of Y rises.
D) Goods X and Y are substitutes.The price of X falls,the quantity demanded of X rises,and the demand for Y falls.
E) Goods X and Y are complements.The price of X falls,the quantity demanded of X rises,and the demand for Y falls.

Question

Quizplus · Accepted Answer

According to the law of demand, when the price of a good falls, the quantity demanded of that good rises. So, if the price of X falls, the quantity demanded of X will rise. As goods X and Y are substitutes, the rise in the quantity demanded of X will lead to a fall in the demand for Y, as consumers switch to buying more of the cheaper substitute good. Therefore, only option D is accurate and sequentially correct.

Which of the Following Statements Represents a Correct and Sequentially