Two goods are substitutes when
A) an increase in the price of one reduces the demand for the other.
B) an increase in the price of one raises the demand for the other.
C) the two goods are used together.
D) the two goods have the same price.

Question

Quizplus · Accepted Answer

When two goods are substitutes, an increase in the price of one good leads to an increase in the demand for the other good, as consumers switch to the more affordable alternative.

Two Goods Are Substitutes When