If the price of margarine falls, the demand for butter will
A) remain unchanged.
B) increase.
C) decrease.
D) rise at first and then fall.

Question

Quizplus · Accepted Answer

If the price of margarine falls, its demand will increase as it becomes a cheaper substitute for butter. As a result, the demand for butter will decrease. This is because consumers will switch from buying more expensive butter to the cheaper margarine, which has become more attractive due to its lower price. Therefore, the answer is option C.

If the Price of Margarine Falls, the Demand for Butter