An increase in the quantity demanded for Product A causes a decrease in Product B's quantity demanded. These are examples of ______ relationships.

An increase in the quantity demanded for Product A causes a decrease in Product B's quantity demanded. These are examples of ______ relationships.

• A. Complementary
• B. Substitute
• C. Income effects
• D. Elasticity of demand

Answer: (B)

Substitute relationships describe goods that can satisfy similar needs. When demand for one product rises, consumers tend to switch away from the other substitute, reducing its demand. Here, an increase in quantity demanded for Product A leads to a decrease in Product B’s quantity demanded, indicating A and B are substitutes. If they were complements, demand for one would rise with demand for the other. Income effects explain how changes in income shift overall demand, and elasticity of demand measures how responsive quantity is to price changes, not cross-good demand shifts.

Substitute relationships describe goods that can satisfy similar needs. When demand for one product rises, consumers tend to switch away from the other substitute, reducing its demand. Here, an increase in quantity demanded for Product A leads to a decrease in Product B’s quantity demanded, indicating A and B are substitutes. If they were complements, demand for one would rise with demand for the other. Income effects explain how changes in income shift overall demand, and elasticity of demand measures how responsive quantity is to price changes, not cross-good demand shifts.