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What is the overall decrease in the price of goods called?
Deflation
Two goods are substitutes if a decrease in the price of one good?
Price will increase
When the decrease in the price of one good causes the demand for another good to decrease the goods are?
substitue
How does supplies affect the price of a product?
A higher price will cause an increase in supply, assuming that all other factors remain constant. Likewise, a decrease in price will cause a decrease of supply and an increase in demand.
What happen to most goods and services when there is an increase in price?
When there is an increase in price, there is a decrease in the quantity demanded.
How price of related goods affect demand?
Price of related goods fall into two categories: substitutes and complements. Complements are when a price decrease in one good increases the demand of another good. Substitutes are when a price decrease in one good decreases the demand for another good.
What is it called if two goods are complements?
A decrease in the price of one will increase the demand for the other.
What is most likely to lead to a decrease in the price of goods?
Demand decreases and supply remains the same.
How would mass production effect the price of goods?
It would make the value of the item decrease.
If goods A and B are substitutes a decrease in the price of good B will?
If goods A and B are substitutes, a decrease in the price of good B will likely lead to a decrease in the demand for good A. Consumers will find good B more attractive due to its lower price, leading them to purchase more of B instead of A. Consequently, the demand curve for good A shifts leftward, potentially reducing its equilibrium price and quantity.
When two goods are complements, how does a change in the price of one affect the demand for the other?
When two goods are complements, a decrease in the price of one good will typically increase the demand for the other good. Conversely, an increase in the price of one good will usually decrease the demand for the other good. This is because the two goods are often consumed together, so a change in the price of one affects the demand for the other.
How do substitute goods and complementary goods affect demand for another good?
Substitutes and complements is the fact that a change in price of one of the goods has an impact on the demand for the other good. For substitutes, an increase in the price of one of the goods will increase demand for the substitute good. (It's probably not surprising that an increase in the price of Coke would increase the demand for Pepsi as some consumers switch over from Coke to Pepsi.) It's also the case that a decrease in the price of one of the goods will decrease demand for the substitute good.
