Two products are perfect substitutes if
A) A consumer is willing to swap one for another at a fixed rate
B) They are valuable only when used together in fixed proportions
C) Their indifference curves are "L-shaped"
D) An increase in the price of one good causes a decrease in the demand for the other good

Question

Quizplus · Accepted Answer

Two products are perfect substitutes if a consumer is willing to swap one for another at a fixed rate, meaning that the consumer is indifferent between the two products and will purchase whichever one is cheaper. This is typically represented by a straight-line indifference curve.

Two Products Are Perfect Substitutes If