If the price of a substitute increases,which of the following is most likely to happen in the market for the product under consideration in the short run?
A)Supply will increase.
B)Firms will leave the market.
C)Firms will devote more variable inputs in the production of this good.
D)Firms will devote less variable inputs in the production of this good.

Question

Quizplus · Accepted Answer

When the price of a substitute increases, demand for the product under consideration is likely to increase as consumers switch to it from the now more expensive substitute. In response, firms are likely to devote more variable inputs to increase production and meet the higher demand.

If the Price of a Substitute Increases,which of the Following