An increase in the price of Colgate toothpaste,a substitute for Crest toothpaste,will cause
A) the quantity of Crest toothpaste demanded to increase.
B) the quantity of Colgate toothpaste demanded to increase.
C) the demand for Colgate toothpaste to decrease.
D) the demand for Colgate toothpaste to increase.
E) the demand for Crest toothpaste to increase.

Question

Quizplus · Accepted Answer

An increase in the price of Colgate toothpaste, a substitute for Crest toothpaste, will make Crest toothpaste relatively cheaper in comparison. This will make consumers switch from buying Colgate to buying Crest, leading to an increase in the demand for Crest toothpaste. Therefore, the best choice is E, "the demand for Crest toothpaste to increase."

An Increase in the Price of Colgate Toothpaste,a Substitute for Crest