Good X and good Y are substitutes in production. An increase in the price of good X will cause the:

Question

Quizplus · Accepted Answer

When goods X and Y are substitutes in production, an increase in the price of good X makes it more profitable, leading producers to allocate more resources to produce X, thus increasing its quantity supplied. Conversely, they will allocate fewer resources to produce good Y, effectively decreasing its supply.

Good X and Good Y Are Substitutes in Production