A and b are substitute goods, but a and c are complementary goods. if the cost of producing a decreases, then the demand for

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12-06-2018
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A and b are substitute goods, but a and c are complementary goods. if the cost of producing a decreases, then the demand for

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MrsTriplet MrsTriplet · Answer 1 · 2018-06-24T20:04:44+02:00

A and b are substitute goods, but a and c are complementary goods. If the cost of producing a decreases, then the demand for B will decrease and the demand for C will increase. The demand changes due to price and substitutes. If something is a direct substitute of something else and the demand for the item is the same and one is cheaper, the demand for the cheaper, same item will remain constant.