Complete the Following: Two Goods Are Substitutes If a Decrease

question 246

Multiple Choice

Complete the following: Two goods are substitutes if a decrease in the price of one good

• A)increases the demand for the other good.
• B)reduces the demand for the other good.
• C)reduces the quantity demanded of the other good.
• D)increases the quantity demanded of the other good.

---

Definitions:

Disposable Income

The total amount of money available for an individual or household to spend or save after income taxes have been deducted.

MPS

The marginal propensity to save, indicating the proportion of additional income that a household saves rather than spends on consumer goods.

C

In economic formulas, "C" typically represents consumption spending by households.

Consumers

Individuals or households that purchase goods and services for personal use.