Question

If the price of chocolate-covered peanuts increases and the demand for strawberry licorice twists increases, this indicates that these two goods are _____ goods. Group of answer choices

Answer 1

Answer: substitute goods

Step-by-step explanation:

Substitute goods refer to the goods that serves thesame purpose by the consumers. A common example is Coke and Pepsi.

For a substitute good, when the price of one of the goods increase, then there will be an increase in the demand of the other one as people will now but more of that good and lesser of its substitute that has a price increase.

In this case, when the price of chocolate-covered peanuts increases and the demand for strawberry licorice twists increases, then the goods are substitute goods.