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JAMB Economics 1981 Question 40

Question 40

Theory of Demand

An increase in the price of butter causes an increase in the demand for margarine. This indicates that butter and margarine are

  1. A.substitute goods
  2. B.complementary goods
  3. C.elastic goods
  4. D.inelastic goods
  5. E.inferior goods.
Show the answer and explanation

Answer: A (substitute goods)

Explanation

When butter becomes dearer people switch to margarine, which shows the two are substitutes.