Question
Goods X and Y are perfect substitutes. When the market price of good X is$5/unit, firm F produces 500 units of X. When the price
Goods X and Y are perfect substitutes. When the market price of good X is$5/unit, firm F produces 500 units of X. When the price of Yrises, 100 consumers of Y shift to the consumption of good X. This causes industry analysts to think that firm F will increase quantity supplied of X to match this increased demand.
This conclusion is flawed because
A.
it assumes that firm F is the only producer of good X.
B.
it assumes that firm F does not export good X.
C.
it assumes that the price of X will not increase in the near future.
D.
it assumes that firm F does not export good X.
E.
it assumes that the supply curve of X will shift to the right in response to the increased demand
please tell me why
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