Suppose a concert by Rihanna and a basketball game played by the Houston Rockets are substitutes, then which of the following is TRUE?
A) If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will fall.
B) If the price of a ticket to a Rockets game decreases, then the demand for Rihanna tickets will fall.
C) If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will remain unchanged.
D) The price of a ticket to a Rockets game will always equal the price of a ticket to a Rihanna concert.

Question

Quizplus · Accepted Answer

If the price of a ticket to a Rockets game decreases, then some individuals who were previously willing to pay for a Rihanna concert may now choose to attend the Rockets game instead, leading to a decrease in demand for Rihanna tickets. Thus, the two events are substitutes and have a negative cross-price elasticity of demand.

Suppose a Concert by Rihanna and a Basketball Game Played