Question
The demand function shows in equation form the relationship between the units sales of good or service and one or more economic variables. {a} The
The demand function shows in equation form the relationship between the units sales of good or service and one or more economic variables.
{a} The demand curve depict the relationship between quantity and price. A change in price is represented by the movement along the demand curve. A change in any other economic variable shift demand curve
{b} A pair of goods are substitutes if an increase in demand for one causes a fall in demand for other. In particular, a price cut for one good reduces sales of the other.
{c} A pair of goods are compliment if an increase in demand for one causes an increase in demand for the other. In particular, a price cut for one good increases sales of the other.
d. A good is normal if the sales increase with increase in income
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ANSWER b A pair of goods are substitutes if an increase in demand for one causes a fall in demand for the other In particular a price cut for one good ...Get Instant Access to Expert-Tailored Solutions
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