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Spaghetti and lasagna are substitutes. Holding all other things constant, this means that if the price of spaghetti increases, the demand for:

A. spaghetti will increase (shift to the right).
B. lasagna will increase (shift to the right)
C. lasagna will decrease (shift to the left).
D. both spaghetti and lasagna will increase (shift to the right).

User Nawazlj
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1 Answer

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Final answer:

If the price of spaghetti increases, and considering that spaghetti and lasagna are substitutes, the demand for lasagna will increase as consumers shift their preference to the less expensive substitute.

Step-by-step explanation:

When considering how the price of one good affects the demand for another, it’s important to understand the relationship between substitutes and complements. In the case where spaghetti and lasagna are substitutes, an increase in the price of spaghetti will lead to an increase in the demand for lasagna, as consumers will look for an alternative to the now more expensive spaghetti. This is because when substitutes like plane tickets and train tickets are considered, a drop in the price of one leads to people favoring the cheaper option and reducing their consumption of the higher-priced substitute.

Therefore, if the price of spaghetti increases, holding all other things constant, the demand for lasagna will increase (shift to the right), which corresponds to option B. It is not true that the demand for spaghetti will increase, nor is it true that both goods' demand will increase simultaneously if only one increases in price.

User Alexandr T
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