If the price of a substitute good of good X falls, then the demand for X will :
Substitute goods have a positive cross-price elasticity of demand; if the price of a substitute good falls, consumers switch to the cheaper substitute, causing the demand…
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If the price of a substitute good of good X falls, then the demand for X will :
Answer and explanation
Correct answer A
Substitute goods have a positive cross-price elasticity of demand; if the price of a substitute good falls, consumers switch to the cheaper substitute, causing the demand for good X to decrease.
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RPSC Senior Teacher Grade II