Explain how the demand for a good is affected by the prices of its related goods. Give examples.

Explain how the demand for a good is affected by the prices of its rel

1.	Explain how the demand for a good is affected by the prices of its related goods. Give examples.
Answer» <html><body><p></p>Solution :There are two types of <a href="https://interviewquestions.tuteehub.com/tag/relatedbrbr-2983848" style="font-weight:bold;" target="_blank" title="Click to know more about RELATED">RELATED</a> goods :- (i) Substitute goods, (ii) Complementary goods. <br/>In <a href="https://interviewquestions.tuteehub.com/tag/case-910082" style="font-weight:bold;" target="_blank" title="Click to know more about CASE">CASE</a> of substitute goods there is a positive <a href="https://interviewquestions.tuteehub.com/tag/relationship-1183331" style="font-weight:bold;" target="_blank" title="Click to know more about RELATIONSHIP">RELATIONSHIP</a> between price of one good and the demand for another i.e as price of one good rises the demand for its substitute rises.<br/>On the other <a href="https://interviewquestions.tuteehub.com/tag/hand-1015171" style="font-weight:bold;" target="_blank" title="Click to know more about HAND">HAND</a>, in case of complementary goods there is a negative relationship between price of one good and the demand for its <a href="https://interviewquestions.tuteehub.com/tag/complement-925776" style="font-weight:bold;" target="_blank" title="Click to know more about COMPLEMENT">COMPLEMENT</a> i.e as price of one good rises the demand for its complement falls</body></html>