Share
Explore BrainMass

How the Quantity of a Good you buy is Affected by Changes in the Prices of Substitute Goods and Complementary Goods

Explain how the quantity of a good you buy is affected by changes in the prices of (a) substitute goods and (b) complementary goods.

Solution Preview

Quantity, Substitutes and Complimentary Goods

Quantities produced vary when prices change for pretty much anything relevant to the product. In this case, it deals with substitutes and compliments.

Substitutions are products that co-vary. In other words, when one goes up in price, the substitutes go up in price. We know that there is an energy drink phase going on. It's a little faddish, but it does not exist by itself. Since people clearly want to be pepped up for whatever reason, substitutes like coffee, chocolate, cocaine and adderall will also see a spike in demand. Someone who wants an AMP might settle for a cup of coffee in the meantime. It is a substitute, an acceptable one.

Think of it this way: it deals with classes of goods rather than good themselves. If more automobiles are ...

Solution Summary

The following posting explains how the quantity of a good you buy is affected by changes in the prices of substitute goods and complementary goods.

$2.19