If smartwatches are considered substitutes for smartphones, then the decline in the price of smartwatches would, all else equal,
A)increase the demand for smartphones.
B)decrease the demand for smartphones.
C)increase the quantity of smartphones demanded.
D)decrease the quantity of smartphones demanded.

Question

Quizplus · Accepted Answer

If smartwatches are substitutes for smartphones, then a decrease in the price of smartwatches will make them relatively cheaper compared to smartphones. As a result, consumers will switch to buying more smartwatches and less smartphones, leading to a decrease in the demand for smartphones. Therefore, the correct choice is B.

If Smartwatches Are Considered Substitutes for Smartphones, Then the Decline