Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect
A) the quantity of good Y demanded to increase and the demand for good X to increase also.
B) an increase in the demand for good X and a decrease in the quantity of good Y demanded.
C) an increase in the quantity demanded of good Y and a decrease in the demand for good X.
D) an increase in the demand for both good X and good Y.

Question

Quizplus · Accepted Answer

When the price of a substitute good (Y) falls, consumers are more likely to purchase more of good Y (increasing the quantity demanded of Y) and less of good X, leading to a decrease in the demand for good X.

Suppose That Goods X and Y Are Substitutes and the Price