If Bread A and Bread B are substitutes for each other, which of the following things would cause the price of Bread B to rise?
A)The price of Bread A rising
B)The price of Bread B falling
C)A decrease in grocery taxes
D)A new nutritional study explaining that bread is a major contributor to obesity

Question

Quizplus · Accepted Answer

If Bread A and Bread B are substitutes for each other, the price of Bread A rising would cause the price of Bread B to rise.
Key Takeaway: If you encounter situational questions like this on the AP Microeconomics exam, think through each step logically. If the price of Bread A rises, this will cause the quantity demanded of Bread A to drop. If Bread B is a substitute for Bread A, there will be an increase in demand for Bread B. This increase in demand will cause in increase in the price for Bread B.

If Bread a and Bread B Are Substitutes for Each