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Explain the effect of change in prices of related goods on the demand for the given goods?
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Explain the effect of change in prices of related goods on the demand ...
How much the consumer would like to buy a given commodity depends on the relative price of other related goods such as substitutes or complementary goods to a commodity.
The demand for a commodity depends on the relative prices of its substitutes. If the substitutes are relatively costly, then there will be more demand for that commodity at a given price and vice versa. Example Tea and Coffee
Similarly, the demand for a commodity is also affected by its complementary products. When in order to satisfy a given want, two or more goods are needed in combination, these goods are referred to as complementary goods. Example pen and ink
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Explain the effect of change in prices of related goods on the demand for the given goods?
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Explain the effect of change in prices of related goods on the demand for the given goods? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Explain the effect of change in prices of related goods on the demand for the given goods? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Explain the effect of change in prices of related goods on the demand for the given goods?.
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