--%>

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 : Economics as a science Economics as a

    Economics as a science:We no longer ask the problem whether economics is an art or a science. Science is a systematized body of knowledge. Merely as physics and chemistry are sciences, econo

  • Q : Contrast a vertically integrated firm

    Contrast a vertically integrated firm, a horizontally integrated firm, and a conglomerate?

  • Q : Illustrate the 4th role is the

    Illustrate the 4th role is the reallocation of resources?

  • Q : Elucidate the ways to finance corporate

    Elucidate the ways to finance corporate activity?

  • Q : Describe High operating leverage

    Briefly describe High operating leverage?

  • Q : Define the for whom query in market

    The market system responses the “for whom?” query with: (i) distributing goods on the basis of require. (ii) using central planning to coordinate production decisions. (iii) catering to consumers with adequate resources to demand goods. (i

  • Q : What does high or low operating

    What does high or low operating leverage specify?

  • Q : Variation of wages in inverse proportion

    This wages vary within inverse proportion to the agreeableness and constancy of the employment was a perception first explicitly stated through: (i) Adam Smith. (ii) Karl Marx. (iii) Thomas Malthus. (iv) John Stuart Mill. (v) David Ricardo.

  • Q : Problem related to market circular flows

    In output markets, the simple circular flow model, households replace their _________ for _________. Can someone help me in determining the right answer from the given options. (1) Resources | income. (2) Labor | g

  • Q : Utility functions to calculate scores

    Question: 1. Nancy is taking a course in Fairy Tales from Professor Grimm and another in Philosophy from Professor Par. In each course there will be two exams, a midterm exam and a final exam. In Professor Grimm's