--%>
Assignment Help - homework help

How demand is influenced by price

Describe how the demand for a good is influenced by the price of its associated goods. Give illustrations.

E

Expert

Verified

Related goods are either replacements or complementary:

Substitutes Goods: Whenever price of a substitude falls or downs, it becomes less costly than given good. Therefore the consumer replaces it for given good will reduce.

Likewise, a rise in the price of substitute will outcome in rise in the demand for specific good. For illustrate Tea and Coffee.

Complementary Goods: Whenever the price of a complementary good falls or downs its demand rises and the demand for the specific good will raise. Likewise whenever price of complementary good rises, then demand
for specific good decreases. For illustration: ?Car and Petrol.

   Related Questions in Business Economics

  • Q : Explain how the Circular Flow Model for

    Explain how the Circular Flow Model for a Market-Oriented System?

    		•
  • Q : Problem on Infrastructure The state

    The state legislature has voted to develop a grant-in-aid policy to try and induce local communities to devote more resources to improving their infrastructure. Town O = Has an operating budget of $2 million; currently spends a tot

    		•
  • Q : Reduce price differences by arbitrage

    When government intervention is not present, than arbitrage: (w) will reduce price differences when similar good sells at various prices within separate markets. (x) results into economic losses for traders. (y) causes high economic profits for mercha

    		•
  • Q : Change in supply and a change in the

    Distinguish between a change in supply and a change in the quantity supplied?

    		•
  • Q : Capitalism-Tightly regulate business I

    I have a problem in economics on Capitalism-Tightly regulate business. Please help me in the following question. The govt. in a purely capitalist state would not: (1) Find out the property rights. (2) Enforce contracts among private parties. (3) Offer

    		•
  • Q : Explain a refutation of the doctrines

    Adam Smith wrote his Wealth of Nations within part like a refutation of the doctrines: (1) classical liberalism. (2) utilitarianism. (3) mercantilism. (4) physiocracy. (5) laissez faire capitalism.

  • Q : Demand supply Newspaper item: “Due to

    Newspaper item: “Due to lower grain prices, consumers can expect retail prices of choice beef to begin dropping slightly this spring with pork becoming cheaper after midsummer,” the Agriculture Department predicted. “This reflects increasing supply,” the department said. Does the statement use th

    		•
  • Q : Divide of the study of economics MOST

    The study of economics is MOST frequently divided within: (1) positive economics and negative economics. (2) macroeconomics and microeconomics. (3) subjective economics and objective economics. (4) supply side and demand side economics. (5) conservative economics and

    		•
  • Q : Depreciation of the euro change the

    If the European euro declines in value (depreciates) in the foreign exchange market, would it be easier or harder for the French to sell their wine in the United States?  Suppose you were planning a trip to Paris.  How would the depreciation of the euro chan

    		•
  • Q : How government might manipulate its

    Explain how government might manipulate its expenditures and tax revenues to reduce unemployment?

    		•