Question

If a 10% increase in the price of one good results in no change in the quantity demanded of another good, then it can be concluded that the two goods are

Multiple Choice

• inferior.

• substitutes.

• unrelated.

• complements.

Answer 1

If an increase in a price of a good leads to an increase in the quantity demanded of another good [vice versa], the two goods are called substitutes and if an increase in a price of a good leads to a decrease in the quantity demanded of another good [vice versa], the two goods are called complements.

But if an increase in the price of one good results in no change in the quantity demanded of another good, then it can be concluded that the two goods are unrelated.

Thus, option 3. unrelated is correct.