--%>

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 : Cost of debt and Equity Cost of debt =

    Cost of debt= (1-tax rate)* interest rate * (debt ÷capital employed)Cost of equity = risk free rate + market premium (equity shareholders funds÷ capital employed)

  • Q : Different types of leverages in

    Write down the different types of leverages which are computed for financial analysis?

  • Q : Describe Net income approach Briefly

    Briefly describe Net income approach? Named who recommended this theory?

  • Q : Consumer purchase decision If the price

    If the price of a good is given, how does a consumer choose/decide as to how much of that good to purchase?

  • Q : Demand supply with the aim of diagrams

    with the aim of diagrams show the difference between A change in demand and A change in quantity demand

  • Q : Distinguish between allocative

    Distinguish between allocative efficiency and productive efficiency. Give an illustration of achieving productive, but not allocative, efficiency?

  • Q : Type of expenditure at the local level

    What is the most important source of revenue and the major type of expenditure at the local level?

  • Q : Elucidate types of unemployment

    Elucidate types of unemployment?

  • Q : Market Apparent program For the

    For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi

  • Q : Forcast 9. The following table shows

    9. The following table shows annual sales data for Stuff Happens, Inc., over the ten-year 1998-2008 period: Year Sales ($ Millions) 1998 $2.0 1999 2.2 2000 2.4 2001 2.6 2002 2.8 2003 3.0 2004 3.2 2005 3.5 2006 3.8 2007 4.1 2008 4.3 A. Calculate the 1998-2008 growth rate in sales using