Question

Consider the following cases.

a. If the price of bacon​ rises, and as a result the demand for sausage​ increases, this implies that these two goods are __________ (complements / unrelated / substitutes).
b. If the price of tennis racquets​ falls, and as a result the demand for tennis balls __________ stays (unchanged / decreases / increases)​, this implies that these two goods are complements.
c. If the price of coffee​ rises, and as a result the demand for sugar​ falls, this implies that these two goods are __________ (unrelated / substitutes / complements).
d. If the price of automobiles ___________ (falls / rises / stays the same), and as a result the demand for motorbikes​ falls, this implies that these two goods are substitutes.

Answer 1

a. substitutes

b.increase

c. Complements

d. falls

Step-by-step explanation:

A substitute or substitute good is a product or service that can be easily replaced with another. In other words, its a product or services a consumer sees as the same or similar to another product.

Due to a fall in price of any commodity, the demand for such commodity is going to increase.

A Complementary good is a good whose use is related to the use of an associated or paired good. Two goods are complementary if using more of good A requires the use of more of good B