Consider the pair of goods X and Y. It is observed that when price of Y falls, the demand for X also…
They are substitute goods. A fall in the price of Y makes Y relatively more attractive, reducing demand for X; complementary goods would instead experience an increase in…
Choose your answer
Consider the pair of goods X and Y. It is observed that when price of Y falls, the demand for X also falls. Which one of the following options would you choose regarding the nature of these goods ?
Answer and explanation
Correct answer B
They are substitute goods. A fall in the price of Y makes Y relatively more attractive, reducing demand for X; complementary goods would instead experience an increase in demand for X.
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Maharashtra and Goa SET (MH SET)