Question

Explain the effect on the demand curve when the price of substitute goods Falls. with the help of
graph.​

Answer 1

Answer:

Complementary goods are those goods which are used together to satisfy a particular want. Demand for a given commodity varies inversely with the price of a complementary good. For example, if price of a complementary good (say, sugar) increases, then demand for given commodity (say, tea) will fall as it will be relatively costlier to use both the goods together. Let us understand this through Fig. 3.11:

clip_image012_thumb2

As seen in the given diagram, price of sugar (complementary good) is shown on the Y-axis and demand for tea (given commodity) on the X-axis. When the price of sugar rises from OP to OP1, demand for tea falls from OQ to OQ1

Explanation:

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