How does price of related goods affect demand for acommodity

1.	How does price of related goods affect demand for acommodity
Answer» Answer: RELATED goods may be in the FORM of substitutes and complementary. (a) Substitute goods are those goods which can be USED in place of others, e.g., tea, coffee, coke, pepsi. the rise in price of tea will raise the demand for coffee or vice-versa. (b)complementary goods are those goods which are jointly demanded to satisfy a particular want, e.g. pen and ink, car and PETROL, etc. in such cases, there will be inverse RELATION between price of one commodity and the demand for the other.

Answer»

Answer:

RELATED goods may be in the FORM of substitutes and complementary.

(a) Substitute goods are those goods which can be USED in place of others, e.g., tea, coffee, coke, pepsi. the rise in price of tea will raise the demand for coffee or vice-versa.

(b)complementary goods are those goods which are jointly demanded to satisfy a particular want, e.g. pen and ink, car and PETROL, etc. in such cases, there will be inverse RELATION between price of one commodity and the demand for the other.

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