If the price of a substitute good increases, what happens to the demand for the

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Question: If the price of a substitute good increases, what happens to the demand for the original good?

Options:

Correct Answer: Demand increases

Solution:

If the price of a substitute good increases, consumers will likely buy more of the original good, increasing its demand.

If the price of a substitute good increases, what happens to the demand for the original good?

If the price of a substitute good increases, what happens to the demand for the original good?

Step 1: Understand what a substitute good is. A substitute good is something that can be used instead of another good.
Step 2: Think about what happens when the price of the substitute good goes up. If it becomes more expensive, people might not want to buy it.
Step 3: Consider what consumers will do instead. If they don't buy the more expensive substitute, they will look for other options.
Step 4: Realize that the original good is an option for consumers. Since the substitute is now more expensive, they will likely buy more of the original good.
Step 5: Conclude that as a result, the demand for the original good increases.

Substitute Goods – Substitute goods are products that can replace each other; when the price of one increases, consumers may switch to the other.