If the price of airline travel in Europe falls and the demand for train travel in Europe also falls, then the two goods are
A) complements.
B) normal goods.
C) substitutes.
D) inferior goods.

Question

Quizplus · Accepted Answer

If the price of airline travel in Europe falls, the demand for train travel in Europe is likely to fall because airline and train travel are substitutes for one another. Consumers will likely choose to fly instead of taking the train because of the lower price of airline travel. Therefore, the two goods are substitutes.

If the Price of Airline Travel in Europe Falls and the Demand