all of the following pairs of goods are substitutes except\na. we observe the price of bacon increases and…
all of the following pairs of goods are substitutes except\na. we observe the price of bacon increases and the demand for eggs decreases.\nb. we observe the price of tennis racquets decreases and the demand for golf clubs decreases.\nc. we observe the price of coffee increases and the demand for tea increases.\nd. we observe the price of automobiles decreases and the demand for public transit decreases.
Answer
Brief Explanations:
Substitute goods are those where an increase in the price of one leads to an increase in the demand for the other. In option C, coffee - tea, and option D, automobiles - public transit, are substitutes as the price - demand relationship follows the substitute pattern. In option B, tennis rackets and golf clubs are substitutes as a price change in one affects the demand of the other in the substitute - like way. However, in option A, bacon and eggs are complementary goods (not substitutes) because an increase in the price of bacon leads to a decrease in the demand for eggs.
Answer:
A. we observe the price of bacon increases and the demand for eggs decreases.