Good X and good Y are substitutes. If the price of good Y increases, then the Group of answer choices 1. demand for good X will decrease. 2. quantity demanded of good X will decrease. 3. demand for good X will increase. 4. quantity demanded of good X will increase.

Question

Carolina Brewer

Business

2 January, 07:58

Good X and good Y are substitutes. If the price of good Y increases, then the Group of answer choices 1. demand for good X will decrease. 2. quantity demanded of good X will decrease. 3. demand for good X will increase. 4. quantity demanded of good X will increase.

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Answers (1)

Know the Answer?

Marlene Allison · Answer 1

The correct option is 3

Explanation:

Under the theory of the consumer, the substitute goods are those kinds or type of goods which the customer or consumer perceives as similar or as comparable, in order to have the more quantity of one good that causes the customer to desire less quantity of the other good.

Usually, the goods are substitute when the price of the one good rises, then the demand for the other good or the substitute goods will increase in the market as then the customers will prefer buying the other good.

So, when the price of the good Y increases or rises, then the demand for the good X will rise or increase as they are substitute goods.