Homework Answers
Option C.
- It is given that the virtual reality headsets and the game consoles are substitutes of each other.
- We know that substitute goods have positive cross price elasticity of demand.
- This means that when the price of one good increases the demand for another good also increases and when the price of one good decreases, the demand for another good also decreases.
- Therefore, when the price of game consoles decline, then the demand for virtual reality headsets also falls.
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