What Is the Effect of a Decrease in the Price

question 10

Multiple Choice

What is the effect of a decrease in the price of potato chips on the market for pretzels,a substitute good,that is initially in equilibrium?

• A)Both equilibrium price and equilibrium quantity of pretzels will increase.
• B)Both equilibrium price and equilibrium quantity of pretzels will fall.
• C)Equilibrium price will increase and equilibrium quantity of pretzels will fall.
• D)Equilibrium price will fall and equilibrium quantity of pretzels will increase.
• E)Equilibrium price and equilibrium quantity of pretzels remain unchanged.

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