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 are externalities and corrective taxes, 1. What are externalities? Giv...

1. What are externalities? Give an example of positive and negative externality and explain why the market outcomes are inefficient in the presence of externalities? 2. What are

What is the macroeconomics, What is the Macroeconomics? Macroeconomics...

What is the Macroeconomics? Macroeconomics is study about the aggregate behavior of the economy like how the actions of all the individuals and firms within the economy intera

What is deplasmolysis of plant cells, The plant cell when placed under hype...

The plant cell when placed under hypertonic medium loses a great quantity of water and its cell membrane detaches from the cell wall. In that situation the cell is known as plasmol

Indirect Utility Function., M.Phil. Admission Test, 2017 Economics Model Qu...

M.Phil. Admission Test, 2017 Economics Model Question Group A Domain Knowledge in Economics Correct answer is as marked in black. Micro Economics 1. Consider a utility function U =

#title.elasticity of demand., different btn elesticity of demand and inelas...

different btn elesticity of demand and inelasticity of demand

Allocation function, Allocation Function The shifting or reallocation ...

Allocation Function The shifting or reallocation of production property into or out of markets based on shifts in prices for the products or services produced in that market.

Work of denison, Work of Denison Normal 0 false fa...

Work of Denison Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Find the elasticity of demand for a quantity, The demand curve for gasoline...

The demand curve for gasoline is P = 200 - 10Q.   a. Find the elasticity of demand for a quantity of 8.  Does this number imply that quantity demanded is sensitive to price chan

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