Individual demand - substitutes and complements, Microeconomics

Assignment Help:

Individual Demand

Substitutes and Complements

1) The two goods are considered substitutes if an increase (decrease) in price of one lead to an increase (decrease) in quantity demanded of other.

  • For example movie tickets and video rentals

2) Two goods are considered complements if an increase (decrease) in price of one leads to a decrease (increase) in quantity demanded of other.

  • For example gasoline and motor oil

3) Two goods are independent when change in price of one good has no effect on the quantity demanded of the other

-If the price consumption curve is sloping downward, the two goods are considered substitutes.

-If price consumption curve is sloping upward, the two goods are considered complements.

*They could be both!


Related Discussions:- Individual demand - substitutes and complements

Supply, plese give me supply assigement

plese give me supply assigement

Microeconomics, #question.Question: Answer all parts (a, b, c, d, e & f). ...

#question.Question: Answer all parts (a, b, c, d, e & f). Consider the following insurance market. There are two states of the world, B and G, and two types of consumers, H and L,

Healthcare economics, #quesExamine the expenditure trends over the last 40 ...

#quesExamine the expenditure trends over the last 40 years. What are the direction and magnitude of changes in spending in and between these various categories (with the exception

Explain the meaning of poverty, Problem 1: (a) Explain the meaning of ...

Problem 1: (a) Explain the meaning of poverty. Briefly explain how poverty is measured? (b) Clearly explain the relationship between Poverty, Inequality and Economic Growt

Distributive bargaining, Distributive Bargaining An approach to negoti...

Distributive Bargaining An approach to negotiation that finds to divide up a fixed amount of resources.

Disadvantages of division of labour, Disadvantages of division of labour: ...

Disadvantages of division of labour: Division of labour may also have disadvantages that may include the following: (i) Lack of Craftsmanship Division of labour does not m

Rent, what is modern theory

what is modern theory

Individual demand - substitutes and complements, Individual Demand Sub...

Individual Demand Substitutes and Complements 1) The two goods are considered substitutes if an increase (decrease) in price of one lead to an increase (decrease) in quant

Four-firm concentration ratios , a) The four-firm concentration ratios for ...

a) The four-firm concentration ratios for the following industries have been found from the Economic Census for Manufacturing (NAICS 31-33) as follows. The four-firm concentration

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd