Exhibit 20-4 -Refer to Exhibit 20-4.As a consequence of the depicted change in the supply of X,the demand curve for Y shifted from D₁ to D₂.It follows that A) X and Y are substitutes. B) X and Y are complements. C) X and Y are inferior goods. D) demand for Y is price elastic.

Question

Quizplus · Accepted Answer

When the supply of X changes and causes the demand curve for Y to shift, it indicates that X and Y are substitutes. An increase in the supply of X would lower its price, leading consumers to switch from Y to X, thus decreasing the demand for Y and shifting its demand curve.

Exhibit 20-4 -Refer to Exhibit 20-4.As a Consequence of the Depicted Change