Complete 3 page APA formatted essay: Price and Demand.
Download file to see previous pages…
the change in quantity demanded will be different for an equal change in price of substitutes as compared to compliments.
With substitute goods such as brands of cereal or washing powder, an increase in the price of one good will lead to an increase in demand for the rival product. Cross price elasticity will be positive. With goods that are in complementary demand such as the demand for DVD players and DVD videos, when there is a fall in the price of DVD players we expect to see more DVD players bought, leading to an expansion in market demand for DVD videos [1].