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

What is the concept of the development, What is the concept of the developm...

What is the concept of the development? The concept of the development: Development is a complicated multi-dimensional concept to do along with enhancements in the human

Describe the different views on development, Problem 1: (a) Explain the...

Problem 1: (a) Explain the common set of problems that developing countries usually face. (b) In your opinion, which of the problems described in part (a), are more signifi

Elasticities and Price Controls, Suppose that two anti-marijuana proposals ...

Suppose that two anti-marijuana proposals are currently being debated in Congress. Proposal I will reduce the supply of marijuana and cause its price to rise by 7%. Proposal II wil

Macroeconomics, 8,000,000 people in the population who are 16 yrs of age an...

8,000,000 people in the population who are 16 yrs of age and older. 80% are willing to work. Currently 10% unemployment rate. a. how many people in labor force? b. How many are un

Time serie, uses of time series in indian economy

uses of time series in indian economy

How much economic production had fallen, The idea for the national accounts...

The idea for the national accounts came during the 1930s depression in the U.S., when decision-makers wanted to get a better sense of by how much economic production had fallen. Si

Utitility, In November 2010, every Mzumbe University student had an income ...

In November 2010, every Mzumbe University student had an income of 150000/= per month,facing the price of meal (X) 1000/= and average price of other goods (Y) 1000/=.The initial ut

Monopoly, unique products in monopoly

unique products in monopoly

Quizzes, I need someone to do my quizzes it has 24 questions each. There ar...

I need someone to do my quizzes it has 24 questions each. There are a total of 11 quizzes

Analysis utility, difference between the cardinal analysis theory and ordin...

difference between the cardinal analysis theory and ordinal theory

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