If price of X increases, then demand for Y too increases. What is the

1.	If price of X increases, then demand for Y too increases. What is the relationship between goods X and Y? Give an example.
Answer» The relationship between goods X and Y is substitute goods. For example: If the price of Tata Tea (X) rises, many people will shift from the consumption of Tata Tea to the consumption of Halmira Tea (Y) because the latter has become relatively cheaper. The demand for Halmira Tea (Y) will increase and that of Tata Tea will decrease. Hence the demand for Halmira Tea (Y) has increased because of increase in price of its substitute Tata Tea (X).

If price of X increases, then demand for Y too increases. What is the relationship between goods X and Y? Give an example.

Answer»

The relationship between goods X and Y is substitute goods.

For example: If the price of Tata Tea (X) rises, many people will shift from the consumption of Tata Tea to the consumption of Halmira Tea (Y) because the latter has become relatively cheaper. The demand for Halmira Tea (Y) will increase and that of Tata Tea will decrease. Hence the demand for Halmira Tea (Y) has increased because of increase in price of its substitute Tata Tea (X).

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If price of X increases, then demand for Y too increases. What is the relationship between goods X and Y? Give an example.

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