Which of the following explains why the quantity of a good demanded decreases when its price increases?
A)Consumer preferences change when the price of a good changes.
B)The nominal income of consumers falls when the price of a good increases.
C)Substitutes become relatively cheaper when the price of a good increases.
D)Complements become relatively cheaper when the price of a good increases.

Question

Which of the following explains why the quantity of a good demanded decreases when its price increases?
A)​Consumer preferences change when the price of a good changes.
B)​The nominal income of consumers falls when the price of a good increases.
C)​Substitutes become relatively cheaper when the price of a good increases.
D)​Complements become relatively cheaper when the price of a good increases.

Quizplus · Accepted Answer

Substitutes becoming relatively cheaper makes consumers more likely to switch to these alternatives when the price of the original good increases, leading to a decrease in the quantity demanded for the original good.

Which of the Following Explains Why the Quantity of a Good