Question

Suppose Colgate and Doctor Toothpastes are substitutes for each other; explain the effect of an increase in the price of Colgate on the demand for Doctor Toothpaste? Also, illustrate diagrammatically this change in the demand for Doctor Toothpaste will be entitled as a change in quantity demanded or a change in demand curve?

Answer 1

An increase in the price of Colgate will cause an increase in demand of Doctors toothpaste. The change will be entitled as a shift in the dem

and curve as below.