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WAEC Economics 1996 Question 7

Question 7

Theory of Demand

If as a result of a fall in the price of commodity X, the quantity demanded of commodity Y falls, then commodities X and Y are

  1. A.complementary
  2. B.in joint demand
  3. C.luxuries
  4. D.in composite demand
  5. E.substitutes
Show the answer and explanation

Answer: E (substitutes)

Explanation

When X becomes cheaper, people buy more X in place of Y, so demand for Y falls: X and Y are substitutes.