Q9 of 15 Page 5

If the price of a substitute Y of good X increases, what impact does it have on the equilibrium price and quantity of good X?

An increase in price of a substitute (y) of goods (x) will directly affect the equilibrium price and quantity of goods (x). Changes in the price of one substitute good tends to change the demand for another substitute good. The demand for good X increased due to the increase in the price of good Y. This situation causes an increase in the price of good X due to excessive demand.



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