Consumers consider that good A and good B are substitutable in consumption. When the price of good A decreases, there is an expectation that there is _____ in quantity of good A demanded and _____ in the demand for good
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease

Question

Quizplus · Accepted Answer

When the price of good A decreases, the quantity demanded for good A increases due to the law of demand. Since goods A and B are substitutes, the demand for good B decreases as consumers switch to the now cheaper good A.

Consumers Consider That Good a and Good B Are Substitutable