In the market for pretzels, which of the following will increase demand? Choose

Question

In the market for pretzels, which of the following will increase demand? Choose one or more: a A. If potato chips are substitute goods for pretzels, the price of potato chips increases. a B. If mustard is a complementary good for pretzels, the price of mustard decreases. o C. If pretzels are inferior goods, income increases D. If mustard is a complementary good for pretzels, the price of mustard increases O E. If pretzels are normal goods, income increases. 7th ttamnt 16/20 19 OF 20 QUESTIONS COMPLETED

Explanation / Answer

correct answer;

A. If potato chips are substitute goods for pretzels, the price of potato chips increases.

B. If mustard is a complementary good for pretzels, the price of mustard decreases.

E. If pretzels are normal goods, income increases.

Explaination :

Option A is correct because

In case of Substitute goods  

if the price of one goods increases, the demand for the substitute goods will increase.

If the price of one goods decreases, the demand for the substitute goods will decrease.

So, If potato chips are substitute goods for pretzels, the price of potato chips increases, the demand for the pretzels goods will increase.

Option B is the correct because;

In case of Complementary goods

If the price for the goods increases the demand for the related products will decrease.

If the price for the goods decreases the demand for the related products will increase.

If mustard is a complementary good for pretzels, the price of mustard decreases therefore the demand for pretzels will increase

So option D is incorrect.

Option E is the correct because

In case of Normal goods

If the income increases, then the demand of the goods increases

So, If pretzels are normal goods, income increases.

Option C is incorrect because

In case of Inferior goods

If the income increases, then the demand of the goods decreases

So, If pretzels are inferior goods, income decreases.

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