Question

If the quantity of good A increases because the price of good B (a related commodity)...

If the quantity of good A increases because the price of good B (a related commodity) decreases, how are the two commodities related? Explain. Use the movements”and shifts in demands for the two commodities.   

Homework Answers

Answer #1

Good A and Good B are substitute goods because the rise in the price of good B caused an increase in the quantity of good A. With the rise in the price of Good B, people will shift their demand towards good A.

This will cause a rightward shift in the demand curve of good A because the demand rose due to the change in the price of good B. Also, the demand curve of good B shows upward movement along the curve because demand of B will fall due to rise in price of good B.

Please upvote, if the answer is fruitful.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
One reason that the quantity demanded of a good increases when its price falls is that...
One reason that the quantity demanded of a good increases when its price falls is that the A. price decline shifts the supply curve to the left. B. lower price increases the real incomes of buyers, enabling them to buy more. C. lower price shifts the demand curve to the left. D. lower price shifts the demand curve to the right.
Q31 - If leisure is a normal good, as the price of leisure increases the quantity...
Q31 - If leisure is a normal good, as the price of leisure increases the quantity of leisure demanded ________ and the demand for leisure ________. 1. Falls; increases 2. Falls; is not affected. 3. Remains the same;decreases 4. Increases;is not affected. Q33 - Consumers do not have a strong preference for the output of one seller over that of another in a perfectly competitive market because 1. There a large number of firms in the market. 2. The firms...
Explain the law of demand, and why as price increases quantity demanded decreases; and, as price...
Explain the law of demand, and why as price increases quantity demanded decreases; and, as price decreases, quantity demanded increases? If taxes were more progressive, would total output be affected?
Only two goods x and y, are available. The price of x increases (but the price...
Only two goods x and y, are available. The price of x increases (but the price of y and income stay the same). It's seen that the quantity of x increases and the quantity of y decreases. Standard preferences (e.g monotonicity) apply. a. Is good x a normal good, inferior good, or can’t tell? Explain. b. Is good y a normal good, inferior good, or can’t tell? Explain. c. Is good x a complement to good y, a substitute for...
. Suppose each of the following cases increases your quantity demanded for Good X by 20...
. Suppose each of the following cases increases your quantity demanded for Good X by 20 percent. What can you determine about your demand for Good X from the information? a. The price of Good X decreases by 22 percent. b. The price of Good Y increases by 10 percent. c. Your income increases by 25 percent.
Total revenue equals the price multiplied by the quantity. The relative change price and quantity is...
Total revenue equals the price multiplied by the quantity. The relative change price and quantity is given by the concept of ________________. Select the correct answer below: profit margin relative value elasticity economies of production When demand is elastic and price increases, what happens to both revenue and quantity? (Select 2 answers.) Select all that apply: revenue decreases revenue increases quantity decreases quantity increases What is the relationship between two goods that are complements? Select the correct answer below: The...
When the price of good "X" increases 20 percent (+20%), Harry decreases his quantity demanded of...
When the price of good "X" increases 20 percent (+20%), Harry decreases his quantity demanded of "X" by 25 percent while Meghan decreases her quantity demanded of "X" by 15 percent. Harry's demand for good "X" is (relatively inelastic / unitary elastic / relatively elastic) and Meghan's demand for good "X" is (relatively inelastic / unitary elastic / relatively elastic). A.  Relatively inelastic; relatively inelastic. B.  Relatively inelastic; relatively elastic. C.  Unitary elastic; relatively elastic. D.  Relatively elastic; relatively elastic.
Suppose good A is an inferior good. Suppose good B is a normal good. Suppose good...
Suppose good A is an inferior good. Suppose good B is a normal good. Suppose good A and good C are substitutes. Suppose good B and good D are complements. Suppose there exists an effective price floor in the market for good A. If the GDP increases in this economy, which of the following statement best describes the situation? The market quantity of good A remains unchanged. The market quantity of good A decreases. The market price of good A...
What conditions ensure that the quantity of a good demanded increases as its price falls? Explain...
What conditions ensure that the quantity of a good demanded increases as its price falls? Explain your answer, using diagrams.
The supply curve is upward sloping because: as the price increases, the quantity supplied will fall....
The supply curve is upward sloping because: as the price increases, the quantity supplied will fall. as the price increases, the suppliers can earn higher levels of profit and hence increases the quantity supplied. as the price increases, consumers demand less. as the price increases, so do costs
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT