If two goods are substitutes, a decrease in the price of one will result in an increase in demand for the other.

Name: If two goods are substitutes, a decrease in the price of one will result in an increase in demand for the other.
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Question

Quizplus · Accepted Answer

If two goods are substitutes, they can be used in place of each other. Therefore, if the price of one decreases, consumers will switch to that substitute, leading to an increase in demand for the substitute good.

If Two Goods Are Substitutes, a Decrease in the Price