Using supply and demand curves, show how an increase in the price of shoes affects the price of a pair of socks and the number of pairs of socks bought and sold.
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Answer:
An Increase in the price of shoes will decrease the demand for a pair of socks, as both are complimentary goods and are demanded at the same time.
Explanation:
A reduction in demand of pair of socks, will run to excess supply, thereby increasing competition in the marketplace which will lead in reduction of monetary value and increase in demand of socks. This increase and decrease will continue until it gets to an equilibrium price.
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