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

Economic development , Economic Development The word development is f...

Economic Development The word development is from the Latin root ‘Voloper’ which meant wrap up, envelop. The English used this word along with ‘des’ meaning ‘undo’. The word

The market supply of labour, graphical illustration describing the influenc...

graphical illustration describing the influence of an increase in immigrants on the market supply of labour

Why is human capital so important in the development process, Why is human ...

Why is human capital so important in the development process? Explain human capital in terms of (the sum of) education/training/experience/ literacy etc, and clearly show how t

Technology sustainability and society, Question 1: ? deduce the causal ...

Question 1: ? deduce the causal factors behind technological developments in different cultures and during different periods of human history ? assess the basis of common cr

Rational producer, would a rational producer be concerned with the average ...

would a rational producer be concerned with the average or marginal product of an input in dec

Network externalities, NETWORK EXTERNALITIES Till this point we have as...

NETWORK EXTERNALITIES Till this point we have assumed that people's demands for good are independent of each other. Actually, a person's demand can be affected by the number

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