136k views
24 votes
Explain the 'price effect' for normal 'substitutes' and 'complementary' goods.​

User FredRoger
by
6.6k points

1 Answer

9 votes

Answer:

When the price of a good that complements a good decrease, then the quantity demanded of one increases and the demand for the other increases. When the price of a substitute good decreases, the quantity demanded that good increases, but the demand for the good that it is being substituted for decreases.

User Yuval Roth
by
6.3k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.