Question

Consumer buys 10 units of Good A when the price of Good B is $5. When the price of Good B rises to $6 (the price of Good A remaining unchanged) the consumer buys 14 units of Good A.

Part B                                                                                            

Is Good A, a substitute for, or a complement to, Good B? Explain your reasoning.

Answer 1

A substitute for good B.

Good A is similar to good B, the two goods can be used for the same purpose, and thus one good can be used in place of another.