Answer to Question #61275 in Microeconomics for shohan ghotra

Question

why is the following true?

If an increase in the supply of good A decreases the demand for good B, then good A and good b are substitutes.

Answer 1

Yes, since increase in the supply of good A means decline of its price. This means that good A is more attractive than good B. Demand for good B falls. It means that these goods are substitutes.