Explain with the help of diagram the effect of price change fall in substitute goods fall in complementary goods
Answers
Answer:
ed Jun 20, 2018 by Golu (i) Demand for a commodity will decrease when there is a fail in the price of substitute goods. Implying that demand curve would shift backward: less will be purchased at the same price. Demand for commodity falls from PK to PK1. Fig. (a) illustrates this situation. (ii) Demand for a commodity will decrease also when there is a fall in income of the consumer (assuming that the commodity demanded is a normal good). This would imply a backward shift in demand curve: less goods will be purchased at the same price. Demand for a commodity falls from PK to PK1. Fig. (b) illustrates this situation. Read more on Sarthaks.com - https://www.sarthaks.com/78455/explain-diagrams-affect-following-changes-demand-commodity-fall-price-substitute-goods