Question

If the price of good X rises and it leads to an increase in demand for good Y, both are ______ goods.

Options

• Substitutes

• Complementary

• Normal

• Inferior

Answer 1

If the price of good X rises and it leads to an increase in demand for good Y, both are Substitutes goods.

Explanation:

Substitute goods are those that can be used in place of the original. That is, an increase in one's price will result in an increase in demand for another. For eg: Tea and Coffee