Question

If Goods X and Y are substitutes, if the price of Good X decreases, this will cause a movement ________ the demand curve for Good X and a ________ shift in the demand for Good Y.

Answer 1

Answer:

The demand curve for goods X will shift inwards as a result of decline in price and outward shift for goods Y.

Explanation:

The demand curve for goods X will shift inwards as a result of decline in price and outward shift for goods Y. Since goods X and Y are both substitute products of each other therefore, if price of goods X will decreased it will cause demand curve to shift towards inward and the demand curve for goods Y will shift towards outwards because the price for goods Y is unaffected.