) If A and B are substitute goods, a decrease in the price of good A would: A) h
ID: 1114505 • Letter: #
Question
) If A and B are substitute goods, a decrease in the price of good A would: A) have no effect on the quantity demanded of B. (B) lead to an increase in demand for B. (C) lead to a decrease in demand for B. (D) none of the statements associated with this question are correcet. a market characterized by the following inverse demand and supply functions Pr = 10-2Qx and P x = 2 +2Qx. An $8 per unit price floor will result in a (A) shortage of 1 unit. (B) surplus of 2 units. (C) shortage of 3 units. (D) surplus of 3 units. (k) Suppose market demand and supply are given by (r = 300-4P and Qs-_50+ 3P. The equilibrium price is: (A) $35. (B) $40. (C) $50. (D) $60. (1) The own price elasticity of demand for apples is -1.2. If the price of apples falls by 5 percent, what will happen to the quantity of apples demanded? (A) It will increase 5 percent. (B) It will fall 4.3 percent. (C) It will increase 4.2 percent. (D) It will increase 6 percent. (m) If apples have an own price elasticity of -1.2 we know the demand is: (A) unitary (B) indeterminate (C) elastic. (D) inelastio. (n) We would expect the demand for jeans to be: (A) more elastic than the demand for clothing (B) less elastic than the demand for clothing. (C) the same as the demand for clothing. (D) neither more elastic, less elastic, nor the same elasticity as that of the demand for clothingExplanation / Answer
Ans:
i) Option C
Lead to a decrease in demand for B
Substitute goods are goods which can be replaced by each other in use. Hence the demand for the good is decreased when the price of another good is decreased.In this case when the price of good A is decreased, this will lead to a decrease in demand for B.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.