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What inference can be drawn if the sales of Product A and Product C are inversel

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Question: What inference can be drawn if the sales of Product A and Product C are inversely related as shown in the line graph?

Options:

  1. Both products are substitutes
  2. Both products are complements
  3. Sales are independent of each other
  4. Market conditions affect both equally

Correct Answer: Both products are substitutes

Solution: 

An inverse relationship typically suggests that the products are substitutes; as one product\'s sales increase, the other\'s decrease.

What inference can be drawn if the sales of Product A and Product C are inversel

Practice Questions

Q1
What inference can be drawn if the sales of Product A and Product C are inversely related as shown in the line graph?
  1. Both products are substitutes
  2. Both products are complements
  3. Sales are independent of each other
  4. Market conditions affect both equally

Questions & Step-by-Step Solutions

What inference can be drawn if the sales of Product A and Product C are inversely related as shown in the line graph?
  • Step 1: Look at the line graph showing sales of Product A and Product C.
  • Step 2: Notice how when the sales of Product A go up, the sales of Product C go down.
  • Step 3: Understand that this means the two products are related in a way that when one is more popular, the other is less popular.
  • Step 4: Conclude that Product A and Product C are likely substitutes for each other.
  • Inverse Relationship – An inverse relationship indicates that as one variable increases, the other decreases, suggesting a trade-off between the two.
  • Substitutes – Products that can replace each other; an increase in the sales of one typically leads to a decrease in the sales of the other.
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