contestada

If goods A and B are substitutes, a decrease in the price of good B will:

increase the demand for good B.
increase the demand for good B and decrease the demand for good A.
increase the demand for good A.
decrease the demand for good A.

Respuesta :

Answer:

decrease the demand for good A.

Explanation:

Under the cross price elasticity of demand, there are two goods i.e substitute goods and the complementary goods.

The substitute goods shows the positive relation between the price of good B and the demand of good A. That means if the price of good B decreases. then the demand of good A is decreases and vice versa

Whereas, in the case of complimentary goods, it shows a negative relation between the price of good B and the demand of good A. That means if the price of good B decreases. then the demand of good A is increases and vice versa