If two goods are close substitutes, then:
an increase in the price of one will increase the demand for the other
Two goods are substitutes when they satisfy the same want, so consumers can switch from one to the other. Their cross price elasticity of demand is positive.
When the price of one substitute rises, that good becomes relatively costlier and buyers shift consumption toward the cheaper alternative, raising its demand. A price fall does the reverse, pulling demand away from the other good, so options C and D are incorrect, and option A describes complements rather than substitutes.
Hence, the correct answer is an increase in the price of one will increase the demand for the other.
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Important Questions from Mixed Topic (MH-SET)
.................... is a client server application that identifies each host on the internet with a unique user-friendly name.
Every OS has a ................ or .......... which primarily resides in the main memory of the computer to perform some of the basic functions of the OS.
(i) Kernel
(ii) Interface
(iii) Nucleus
(iv) Compiler
Codes:
Which of the following are referred to as low level language?
(i) Machine language
(ii) Assembly language
(iii) High level language
(iv) Natural language
Codes:
Match the following:
List I List II (a) New York Public Library (i) Shelv AR (b) Miami University Augmented Research Group (ii) Smart library (c) Oula University Library (iii) Wolf Walk (d) North Carolina State University (iv) Find the future Codes:
Which part of the QR code represents the encoded data?
