Answer to Question #24584 in Microeconomics for saad

Question #24584
Silk shirts are often worn with linen trousers. If the price of linen trousers drops, in the market for silk shirts the likely effect will be: A. P* up, Q* down B. P* up, Q* up C. P* down, Q* down D. P* down, Q* up E. A movement to the left along the supply curve.
1
Expert's answer
2013-02-26T08:20:00-0500
B. P* up, Q* up
Changes in the price of a substitute or complement affect demand. Changes in the price of related goods change the demand for the other related goods. A change in the price of a substitute will cause an inverse change in demand for related products, whereas a change in the price of a complement will cause a direct change in demand for related products.

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