When the decrease in the price of one good causes the demand for another good to decrease, the goods are_________?
Correct answer: B. substitutes
- A. complements
- B. substitutes
- C. inferior
- D. nromal
Explanation
For substitutes, a fall in the price of one good makes consumers buy less of the other, shifting its demand downward. Complements show the opposite cross-price relationship.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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