Question
Changes in the price of an item, in addition to affecting the amount of demand for the goods themselves, will also affect the demand for
Changes in the price of an item, in addition to affecting the amount of demand for the goods themselves, will also affect the demand for other goods, both substitute goods and complementary goods. There are two effects caused by changes, namely the substitution effect and the income effect. Answer the following questions regarding the above topic, namely:
1) Explain the meaning of substitute goods, the types of goods, and how it will affect if the price of substitute goods goes up or down; 2) Explain the meaning of complementary goods, examples of goods, and how it will affect if the price of complementary goods increases or decreases 3) explain the substitution effect and the income effect of normal goods using graphs
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